COMM 300: Details about financial statements
From BluWiki
Contents |
Income statement from a financial prespective
- Value to customers
- Sales
- Labor costs
- Material costs
- Depreciation
- Operating income
- Interest expense
- Earnings before tax
- Taxes
- Net income
- Dividends
- Addition to retained earnings
- Consumer surplus = sales - value to customers
- Employees' cliams = labor costs
- Suppliers' claim = material costs
- Debtholders' claim = interest expense
- Governmetn's claim = taxes
- Shareholders residual claim = dividends
- This must be true:
- Alternative choices
- Free dessimenation of information
- The ability to make choices
Net working capital
- Net working capital = Current assets - current liabilities
- One of the key indicators of financial health
Sources & Uses
total sources = total uses
Sources:
- Increase in claims
- Decrease in assets
- addition of net profits
- Depreciation and depletion
- Sale of stock or debt
- basically same as first line
Uses
- Decrease in claims
- Increase in assets
- Net losses
- Cash dividends paid
- Repurchase of stock or debt
Book value is a poor surrogate for market value!!!
