Summary
Summary Strategic Finance IB Y4Q1
- Course
- Institution
- Book
The summary "Strategic Finance" covers all chapters of the book and the material used during the training sessions
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
2 reviews
By: hristochernogorov • 4 year ago
By: guulstienen • 4 year ago
very impressed!
Seller
Followsimonesnepvangers
Reviews received
Content preview
0, Chapter 2 “An overview of Financial Statements”
Types of Financial Statements
1. The balance sheet = provides information regarding a company’s assets and liabilities at a
specific point in time
- Assets = represent sources of value
- Liabilities = represent owner’s equity
2. The income statement = provides information regarding revenues and expenses over a
period of time
3. The cash flow statement = provides information regarding a company’s sources and uses of
cash over a period of time
- Operating activities = related to the core business activities
- Investing activities = related to the purchase or sale of fixed assets
- Financing activities = related to obtaining or repaying additional funds
4. The statement of changes in owner’s equity = provides detailed information regarding
changes in the company’s equity capital over a period of time
An overview of the Balance Sheet
The balance sheet provides insights regarding short-term liquidity and long-term solvency
Major sections;
- Assets = resources that are expected to generate future economic benefits
Current asset = expected to be liquidated within one year (one operating cycle)
Non-current asset = expected to provide long-term economic benefits
- Liabilities = obligations that will lead to an outflow of economic benefits
Current liability = an obligation that is expected to be fulfilled within one year
Non-current liability = an obligation that is expected to be fulfilled after one year
Working capital = the difference between current assets and current liabilities
- Equity = the residual “interest” of the company’s owners, determined as the difference
between assets and liabilities
Measuring Assets & Liabilities
2 alternative measuring methods
- Historical cost = the value of the asset/liability when it was acquired, including;
acquisition, preparation or installation costs
- Fair value (market value) = the amount at which an asset could be sold or a liability could
be fulfilled
Off balance Sheet items = There are some items and disclosures that are off the balance sheet, and
included in the financial notes.
e.g. Operating lease is never on the balance sheet
The balance sheet provides 2 main insights;
1. The level of debt = the amount of money that the company has borrowed
2. The maturity of the debt = when the loans come due
You want to know if the company has enough money to pay its upcoming loans
An Overview of the Income Statement
The income statement (or the Profit & Loss) Income = revenue – expenses
1
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 simonesnepvangers. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $5.86. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
56326 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now