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FINANCIAL STATEMENTS - Coggle Diagram
FINANCIAL STATEMENTS
Companies are required by law to give their shareholders certain financial information
Negative items on financial statements such as creditors, taxation, and dividends paid.
The basic accounting equation
Assets Liabilities + Owners' (or Shareholders')
Assets Liabilities - Equity.
An alternative term for Shareholders' Equity is Net Assets.
A company's market capitalization is generally higher than shareholders' equity or net assets
Financial statements in their annual reports
The profit and loss account
Shows revenue and expenditure
Generally be a profit an excess of income over expenditure
Part of the profit is
Paid to the government in taxation
Distributed to shareholders as a dividend
Retained by the company to finance further growth
The balance sheet
Shows the financial situation of the company on a particular date
It lists the company's
A business's assets
cash investments and propert, Debtors
Liabilities
money that a company will have to pay to someone else
taxes, debts, interest and mortgage payments
The source and application of funds statement
Shows the flow of cash in and out of the business between balance sheet dates
Applications of funds includ
The purchase of fixed or financial assets
The payment of dividend
The repayment of loans
Trading losses