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Accounting: Using Financial Statements to Analyze A Company's Financial Health.

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by

Lauren Donovan

on 7 December 2018

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Transcript of Accounting: Using Financial Statements to Analyze A Company's Financial Health.

Accounting = Awesome!
Balance Sheet
Assets - Liabilities = Owner's Equity
What is Accounting?
The language of business
Business Transactions
What other groups would be interested
in accounting information?
Creditors
Employees
Stockholders
Managers
Accounting: Who Needs It?
Managers
Shareholders
Employees
Banks
Accounting Types
Debt vs. Equity Financing
Opening Activity
1. Think about how often and how much money you spend each month.
2. List the instances money leaves your wallet or account.
3. Think about how much and how often money comes into your wallet or account.
4. How might you use this information to tell you about
the past and the help you predict the future?
Financial

Managerial
GAAP
Generally Accepted Accounting Principles
Sarbanes-Oxley Act

What Does the Sarbanes-Oxley Act Say?
1. Executives cannot borrow $ from their corporation.
2. CEOs and CFOs must sign statements attesting to accuracy.
3. At least one Board member must be a financial expert, not employed by the company.
4. Requiring corporate lawyers to report abuse.
Major Financial Statements
1.) The Balance Sheet
2.) The Income Statement
3.) The Statement of Cashflow
(internal)
(external)
The Income Statement
Sales, Expenses, and Profit
Simple Income Statement
Examples?
Discussion
If you were asked to lend money to your cousin's clothing store to help her through a slow sales period, why would you want to look at assets and liabilities?
The Balance Sheet
Assets
-
Liabilities
=
Owner's Equity
what a company
owns
what a company
owes
Discussion
Why would you also want to see your cousin's sales data? What would be the advantage of analyzing sales data for the last three years?
Statement of Cashflow
Tracks how much cash is coming
in and going out.
Full transcript