Financial Statement Basics
This document shows a company’s assets, liabilities, and equity at a specific point in time.
What is the Balance Sheet?
These are the resources a company owns, such as cash, inventory, and property.
What are assets?
This is the top line of an income statement, representing total revenue before any expenses.
What is revenue?
This type of cash flow measures the company’s earnings from its core business operations
What is operating cash flow?
The five major categories of financial ratios include solvency, profitability, efficiency, market and ________ ratio.
What is Liquidity?
The minimum number of financial statements a company is required to produce for external reporting under generally accepted accounting principles (GAAP).
What are three? (Balance Sheet, Income Statement, and Cash Flow Statement)
These are the debts or obligations a company owes to outside parties, like loans or accounts payable.
What are liabilities?
This expense on the income statement includes wages, rent, and other operating costs.
What are operating expenses?
This section of the cash flow statement reflects money coming in or going out due to debt and equity transactions.
What is financing cash flow?
What is Solvency Ratio?
What is the language of business?
What is Accounting?
he sum of liabilities and equity must equal this amount, found on the balance sheet.
What are assets?
This figure is calculated by subtracting operating expenses and cost of goods sold from revenue.
What is operating profit?
Cash spent on purchasing equipment, land, or investments is included in this section.
What is investing cash flow?
This ratio helps assess a company's ability to cover its short-term liabilities with its short-term assets.
What is the current ratio?
These provide additional information or explanations about the financial statements, helping to clarify specific figures or policies.
What are footnotes?
These are assets that a company expects to convert into cash or use up within one year.
What are current assets?
Operating income + interest income (non-operating income) =?
What is pre-tax income?
Non-cash expense such as depreciation that reduces net income and is _______ on the cash flow statement.
What is added?
This ratio is considered the minimum acceptable benchmark for a company’s ability to pay off its short-term liabilities with its short-term assets. A ratio below this might indicate liquidity problems.
What is 1.0 (or a current ratio of 1:1)?
This set of accounting principles is followed by companies in the United States to prepare financial statements.
What is GAAP (Generally Accepted Accounting Principles)?
The statement of stakeholder's equity can be divided into these two subcomponents.
What are capital and profits?
In our sample income statement, what is the final line item?
What is Earnings per Share?
Adjustment is made to convert net income from ________ basis to a cash basis, by adding back non-cash expenses
What is Accrual Method.
What solvency ratio does ED use to monitor the financial health of Load-Serving Entities in the enforcement of RA requirements?
What is Debt Service Coverage Ratio?