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Financial statements

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by

khouloud chalbi

on 3 May 2015

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Transcript of Financial statements

Important to investors





Shows the company's capacity of generating cash
B R I C
Records :
Presented by : Manel DERBEL
Ons KHFACHA
Sahar KESSENTINI
Khouloud CHALBI

Financial Statements
INTRODUCTION

1. TYPES OF FINANCIAL STATEMENTS

2. INTERRELATION

3. PURPOSE OF FINANCIAL STATEMENTS

CONCLUSION
THE OUTLINE
End result of the financial information
What are Financial Statements
Basic financial documents
1. Types of financial
statements
2. Interrelation
Balance sheet
Retained Earnings statement
Income statement
Cashflow statement
Income Statement
Profit / Loss statement
It measures the performance
Income statement is composed of
2 elements

:
Income/ Revenue
Expenses
(Money earned)
(Money spent)
Net Profit / Net Loss = Income - Expenses
Why do we need "Income Statements" ??
It answers the question : How well is the company's business performing?
Revenue > Expenses
Revenue < Expenses
Statement of Retained Earnings / Changes in equity
The importance of "S.R.E"
Gives an idea on :
The way income is distributed

How much funds left to reinvest
Balance Sheet / Statement of financial position
Snapshot of the financial position of the company
Record of a company's
assets
,
liabilities

and
equity
at a particular point in time.
Assets
What the business owns/controls
Liabilities
What the business owes to someone
Equity
What the business owes to its owners
Assets = Liabilities + Equity
Balance?
Why is the balance sheet Important ?
Gives the investor an idea on the company's health
Assets >>> Liabilities
Assets << = Liabilities
Cashflow Statement (CFS)
Shows how a company's operations are running
CFS focuses on 3 cash related activities:
Is CFS important ? to whom?
* Income statement
** Retained earnings statement
*** Balance sheet
**** Cashflow statement
Net Profit
Profit retained
Cash
3.What's the purpose of having financial statements
Owners and managers:
Continue/discontinue a part of the business.
Make / purchase certain materials.
Acquire/rent/lease certain equipments needed in the production of goods.

Other individuals and entities
Time
Performance
Day to day business
purchase and sale of
assets
issuing and borrowing of
funds
Dividends
INTRODUCTION

1. TYPES OF FINANCIAL STATEMENTS

2. INTERRELATION
THE OUTLINE
3. PURPOSE OF FINANCIAL STATEMENTS
CONCLUSION
Readers
need to :



Understand the key facts / disposition of the business
make decisions based on their reading of the statements
A lending institution : Wether or not to lend funds

Government entities : Ascertain the propriety and accuracy of taxes and other duties declared and paid by a company

Vendors who extend credit : assess the creditworthiness of business
CONCLUSION
Thank you for your attention !
Full transcript