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Four Basic Financial Statements, = Ending Retained Earnings, Reference:…
Four Basic Financial Statements
Income Statement
Revenues (Sales):
Total generated from operations.
Cost of Goods Sold
: Direct production costs.
Gross Profit:
Sales – Costs.
Operating Expenses:
Sales & Marketing
G&A (rent, salaries, utilities)
R&D
Operating Income:
Profit after operating expenses.
Non-operating Income:
Interest, asset sales.
Income Before Taxes:
Earnings before tax.
Income Tax Expense
Net Income:
Final result.
Balance Sheet
Assets
•
Current
: Cash, investments, accounts receivable.
•
Non-current
: Fixed assets, goodwill.
Liabilities
•
Current
: Accounts payable, accrued taxes.
•
Non-current
: Long-term loans, bonds.
Equity
Common stock
Retained earnings
Treasury stock
Cash Flow Statement
Operating Cash Flow
From operations:
income, depreciation, account changes.
Investing Cash Flow
Purchase/sale of fixed assets.
Financing Cash Flow
Loans, share issuance, dividend payments.
Net Increase in Cash
Statement of Retained Earnings
Beginning Retained Earnings
+Net Income
–Dividends
= Ending Retained Earnings
Reference: Bragg, S. (2022). The four basic financial statements. AccountingTools.
https://www.accountingtools.com/articles/the-four-basic-financial-statements.html