Financial statements 101
Do you know the basics of Financial Statements?
I teach you everything here:
Do you know the basics of Financial Statements?
I teach you everything here:
1️⃣ Balance sheet
The balance sheet consists of the following elements:
✅ Current assets
✅ Long-term assets
✅ Current liabilities
✅ Long-term liabilities
✅ Shareholders equity
The balance sheet consists of the following elements:
✅ Current assets
✅ Long-term assets
✅ Current liabilities
✅ Long-term liabilities
✅ Shareholders equity
The balance sheet is based on a simple formula.
Assets 🟰 Liabilities ➕ Equity.
Its purpose is to describe what a company owns and what it owes.
Assets 🟰 Liabilities ➕ Equity.
Its purpose is to describe what a company owns and what it owes.
2️⃣ Income statement
An income statements consists of the following elements:
➕ Revenue
➖ Cost of goods sold
🟰 Gross profit
➖ Operating expenses
🟰 Operating income
➖ Non-operating income/expense
🟰 Pre-tax income
➖ Income tax
🟰 Net income
An income statements consists of the following elements:
➕ Revenue
➖ Cost of goods sold
🟰 Gross profit
➖ Operating expenses
🟰 Operating income
➖ Non-operating income/expense
🟰 Pre-tax income
➖ Income tax
🟰 Net income
3️⃣ Cash Flow Statement
The Cash Flow Statement consists of the following elements:
✅ Cash flow from Operating Activities
✅ Cash flow from Investing Activities
✅ Cash flow from Financing Activities
The Cash Flow Statement consists of the following elements:
✅ Cash flow from Operating Activities
✅ Cash flow from Investing Activities
✅ Cash flow from Financing Activities
▪️ Cash flow from Operating Activities
Net income
➕ Non-cash changes
➕/➖ Changes in working capital
🟰 Cash flow from operations
Net income
➕ Non-cash changes
➕/➖ Changes in working capital
🟰 Cash flow from operations
▪️ Cash flow from Investing Activities
➖ Capital expenditure
➖ Acquisitions
➕ Proceeds from the sale of investments
🟰 Cash flow from investments
➖ Capital expenditure
➖ Acquisitions
➕ Proceeds from the sale of investments
🟰 Cash flow from investments
▪️ Cash flow from Financing Activities
➕/➖ Borrow / Repay debt
➕/➖ Issue / Re-purchase stock
➖ Pay dividends
🟰 Cash flow from financing
➕/➖ Borrow / Repay debt
➕/➖ Issue / Re-purchase stock
➖ Pay dividends
🟰 Cash flow from financing
That's it for today.
If you liked this, you'll LOVE our free course.
In this course we teach you how to read Financial Statements like a professional.
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If you liked this, you'll LOVE our free course.
In this course we teach you how to read Financial Statements like a professional.
Sign up here to receive it for free:
eepurl.com
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