This leftover money belongs to the shareholders, or the owners, of the company. It’s the money that would be left if a company sold all of its assets and paid off all of its liabilities. Shareholders’ equity is sometimes called capital or net worth. Liabilities also include obligations to provide goods or services to customers in the future. This can include all kinds of obligations, like money borrowed from a bank to launch a new product, rent for use of a building, money owed to suppliers for materials, payroll a company owes to its employees, environmental cleanup costs, or taxes owed to the government. Liabilities are amounts of money that a company owes to others. It also includes things that can’t be touched but nevertheless exist and have value, such as trademarks and patents. Assets include physical property, such as plants, trucks, equipment and inventory. This typically means they can either be sold or used by the company to make products or provide services that can be sold. Let’s look at each of the first three financial statements in more detail.Ī balance sheet provides detailed information about a company’s assets, liabilities and shareholders’ equity.Īssets are things that a company owns that have value. The fourth financial statement, called a “statement of shareholders’ equity,” shows changes in the interests of the company’s shareholders over time. Cash flow statements show the exchange of money between a company and the outside world also over a period of time. Income statements show how much money a company made and spent over a period of time. Balance sheets show what a company owns and what it owes at a fixed point in time. They are: (1) balance sheets (2) income statements (3) cash flow statements and (4) statements of shareholders’ equity. There are four main financial statements. They show you where a company’s money came from, where it went, and where it is now. We all remember Cuba Gooding Jr.’s immortal line from the movie Jerry Maguire, “Show me the money!” Well, that’s what financial statements do. Let’s begin by looking at what financial statements do. It will not train you to be an accountant (just as a CPR course will not make you a cardiac doctor), but it should give you the confidence to be able to look at a set of financial statements and make sense of them. Just as a CPR class teaches you how to perform the basics of cardiac pulmonary resuscitation, this brochure will explain how to read the basic parts of a financial statement. This brochure is designed to help you gain a basic understanding of how to read financial statements. The basics aren’t difficult and they aren’t rocket science. If you can follow a recipe or apply for a loan, you can learn basic accounting. Share this Reddit Posts to your friends if they got Edgenuity, too.If you can read a nutrition label or a baseball box score, you can learn to read basic financial statements. I'm not able to just leave it out in the public since Reddit will take it down because of copyright, lol. If you want the answer key, you can dm me or you can comment so it'll get more people to see it. There's also a Tips and Tricks folder that needs more added to it, so if you have any of those to give, it would be appreciated. If you want to start doing an Answer Key too! I have a template, that is simple and clear to understand. I will add credit to the file and on this post. If you have been keeping score of your answers, you can always dm me the link and I'll add it to the Google Drive Edgenuity Files. So, now that it's made, I hope it helps a lot of people to get work done especially if they're really behind! I made this because I was having to do all the research and I would've loved it, if someone had already done this. I've been adding the answer key to my World History and Biology course. I'm remaking this, so it'll be more coherent.
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