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Finance and Accountning - Coggle Diagram
Finance and Accountning
Final Accounts
Balance Sheet
A statement (snapshot) that records a business asset, liabilities, and equity
Non-Current Assets (long term) - Current Assets (Short Term) - Current Liabilities (Short Term) - Non-Current Liabilities (Long Term) - Equity (Retained profit and Share Capital)
Profit & Loss statment
A statement that records sales revenue and costs of a business to determine the net profit and/or the distribution of profit
Gross Profit (Sales Revenue - COGS) - Expenses (Gross profit - Indirect Expenses) - Dividens/Retained Profit
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Liquidity Ratios
Measures a business ability to cover its short term debt obligations, without having to sell of any fixed assets.
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Investment Apprasial
Payback period: 1) Accumulated before surpassing Initial investment limit. 2)Find difference left from initial investment 3) Divide amount of next year by 12 4) Divide step 2 by 3 to find months left
Average rate of return: 1) Accumulated - Initial Investment 2) Answer of step 1 divided by number of years 3) Divide answer to step 2 by Initial amount 4) x100
Net present value: 1) Locate discount factor in table 2) Multiply discount factor and net cash flow 3) add all present value 4) present value - initial investment