Terminology
Short term ability to pay liabilities
What is liquidity
A debt or money that needs to be repaid
What is a liability
This statement shows the outcome of sales and expenses
What is a profit and loss statement / revenue statement
Stock + Purchases + Freight - Remaining Stock
What are COGS - cost of goods sold
The long term ability to pay liabilities
What is solvency?
retained profits or owners contribution
What is Equity
This statement shows how assets are financed with liabilities and equity
What is a balance sheet
Revenue - COGS
What is Gross Profit
When Revenue is greater than expenses
What is Profit
Finance offered by a bank usually to buy property
What is a Mortgage
A forecast of financial activity
What is a budget
Gross Profit - Expenses
What is Net Profit
What is current asset?
an overdraft is an example
What is a a current liability or What is external finance
This statement is used to determine liquidity
What is a Cash Flow statement
Assets = Equity + Liabilities
What is the Accounting Equation
The institution in which Australian shares are bought and sold
What is the ASX - Australian Stock Exchange
Share issue is an example
What is equity finance
Gearing - the debt to equity ratio that is used to measure solvency is calculated using this statement
What is a Balance Sheet
Current Assets - Current Liabilities
What is working capital