Summary of the Finance course in the first year of BUAS. All information for the first year has been included, the lectures of JC, a summary, and formulas. Good luck! In addition, you would make me very happy by leaving a review after buying one of my documents :)
long-term bank loans, AP
(captial) = eigen vermogen
cash, equipment,
inventory, AR
net income, common shares
receivables
What are things we own (assets)?
o Cash (bank, cash register)
o Inventory
o Equipment
o Land
o Buildings
What are things we owe (liabilities)?
o Money owe from the bank
o Accounts payable = buy on credit for somebody pay within one year
Breaking down equity, three components:
• Capital (owner’s investment)
• Retained earnings (aggregate of NET income/loss)
• Dividends (amount given to investors)
Revenues = amounts we would earn from selling goods or services
Expenses = amounts we would pay out for the cost of operations (sold inventory, G/W/L,
rent, and salaries)
Original/share capital
Beginning retained earnings
+ NET income (revenues – expenses)
- Dividends
Ending balance retained earnings
= owner’s equity
Dividends = a sum of money paid regularly by a company to its shareholders out of its profits
(or reserves).
, Balance sheet
Assets = what the company owns (cash, invoices, furniture, equipment, technology)
o Current assets = used within one year (cash, inventory, accounts receivable)
o Non-current assets = last more than one year (property, plan, and equipment,
technology, patents, trademarks, goodwill)
Liabilities and shareholders’ equity = what the company owes (unearned revenues)
o Current liabilities = used within one year (accounts payable, other payments)
o Non-current liabilities = last more than a year (LT leases, long-term debt)
o Shareholders’ equity (common shares, retained earnings)
Option 1: register a transaction on both sides of the balance sheet
Option 2: register a transaction twice at the same side of the balance sheet as both positive
and negative numbers
Finance (lecture 3)
What would be more interests finding out, your profit of cash? Always both
• Profit cannot be measured alone
• How much profit is converted into cash?
Double entry accounting = to ensure all transactions are recorded in the balance sheet
assets liability/ shareholders’ equity
current assets (1 year) current liabilities
• cash • accounts payable
• inventory • short-term debt
• account receivables
• marketable securities non-current liabilities
• bank loan
non-current assets (more than 1 year) • long-term debt
• equipment
• fixed assets shareholder’s equity
• PP&E • common share
• goodwill • share capital
• amortization • retained earnings
• intangible assets • revenues
• costs of sales (COGS)
• salaries / interest
= total shareholder equity
total …..
total …..
Changes in the balance:
• Cash (current assets and equity)
• Bank loan (current assets and non-current liabilities)
• Equipment (current assets and non-current assets)
• Inventory (current assets)
• All inventory (current assets and equity)
• Salaries (current assets and equity)
• Interest (current assets and equity)
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller FloorSteenberg. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.76. You're not tied to anything after your purchase.
