Finance & Accounting; A basic Introduction, is completely summarized in this document, which includes theory, formulas, examples and additional information from PowerPoint slides.
International Business and Management Studies / IB
Finance & Accounting
All documents for this subject (1)
2
reviews
By: piyarajwani • 1 year ago
By: nervoski123 • 5 year ago
Seller
Follow
QSummaries
Reviews received
Content preview
Finance; introduction
Exam (open questions) module 2A (=3 ECTS)
Grade ≥ 5.5 is required to pass
Exam + Assignment Stock Portfolio module 2B (=3 ECTS)
Knowing and implementing the formula = 10 points
Financial statements
Balance sheet, Income statement, Cash flow statement
Financial analysis
Financial ratios, Valuation ratios
Financial management
Time value of money, Financing
Lecture 1; balance sheet
Financial records provide information for stakeholders like Shareholders, Management, Employees,
Authorities, Special interest groups, Creditors.
The balance sheet = An overview that shows the financial situation of a business at a particular
moment.
January 31, 2019
Debit: assets Credit: Equity and Liabilities
The resources that the business owns at a The sources: how the assets are financed and
certain moment where the money came from
Balance Sheet must be always in equilibrium.
January 31, 2019
, Non-current assets (fixed assets) = those assets that can be used more than once e.g. building and
equipment.
Depreciation of non-current assets must be taken into account. Depreciation = a method of
reallocating the cost of a tangible asset over its useful life span of it being in motion (-> an
expense).
Current assets can only be used once e.g. inventory and cash
Accounts receivable = amounts owed to the firm (claims on customers)
Equity = the amount of money the owner(s) have invested in the company.
Depends on legal form of business (lecture 4)
Non-current liabilities = a company’s long-term financial obligations that are not due within the
present accounting year e.g. long-term debt.
Current liabilities = all liabilities of the business that are to be settled in cash within the fiscal year
e.g. short-term debt.
Accounts payable = amounts owed to suppliers
Equity increases if Equity decreases if
Direct investment by the owner Direct capital withdrawal by the owner
(issuing new shares)
Reinvesting profit in the business Loss
Leads to two ways to calculate equity:
1) Equity = Assets – All liabilities (debts)
2) Equity = Original Equity +/- Profits (Losses) +
Capital injections – Capital withdrawals
Company trades in products: Buy at €5, Sell at €8.
Look at examples from PPT 1.
Redemption payments are no costs!
Depreciation of non-current assets are not payments!
Lesson 2; income statement
An income statement shows the revenues and expenses (the profit or loss) over a certain period.
Revenues: value of goods sold - Expenses: value of production means used = Profit
Everything you consume this year.
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 QSummaries. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $4.22. You're not tied to anything after your purchase.
