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Fima Guide

The document outlines the balance sheet and income statement, detailing a company's financial position and performance. The balance sheet includes assets, liabilities, and equity, while the income statement covers revenue, expenses, and net income over a specific period. Key components include current and non-current assets and liabilities, as well as gross profit and operating income.

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6 views

Fima Guide

The document outlines the balance sheet and income statement, detailing a company's financial position and performance. The balance sheet includes assets, liabilities, and equity, while the income statement covers revenue, expenses, and net income over a specific period. Key components include current and non-current assets and liabilities, as well as gross profit and operating income.

Uploaded by

andreabonifide
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Balance Sheet

The balance sheet shows what a company owns (assets), owes (liabilities), and what is left
for the owners (equity) at a specific time.
1. Assets (What the company owns)
o Current Assets (Short-term, usually converted to cash within a year):
 Cash and cash equivalents
 Accounts receivable (money owed by customers)
 Inventory (products the company is selling or making)
 Prepaid expenses (e.g., rent, insurance paid in advance)
 Marketable securities (investments that can be quickly sold)
o Non-current Assets (Long-term assets):
 Property, plant, and equipment (buildings, machines, etc.)
 Intangible assets (patents, goodwill)
 Long-term investments
2. Liabilities (What the company owes)
o Current Liabilities (Debts due within a year):
 Accounts payable (bills owed to suppliers)
 Short-term debt
 Accrued expenses (e.g., wages owed)
 Current portion of long-term debt
o Non-current Liabilities (Debts due in more than a year):
 Long-term debt (loans that will take more than a year to pay)
 Deferred tax liabilities
3. Equity (The owners' share of the company)
o Common stock (money shareholders have invested)
o Retained earnings (profits the company has kept, minus dividends paid out)
o Treasury stock (shares the company bought back)
o Other comprehensive income (gains or losses not yet realized)

Income Statement
The income statement shows the company’s performance over a period of time, detailing revenues,
expenses, and the resulting profit or loss.
1. Revenue (Sales) (Money the company earns)
o Gross sales
o Net sales (after discounts and returns)
2. Cost of Goods Sold (COGS) (The cost of producing or purchasing the inventory that was sold)
o Raw materials
o Direct labor (wages for making products)
3. Gross Profit (Revenue minus COGS)
4. Operating Expenses (Costs of running the business)
o Selling, General & Administrative (SG&A) expenses:
1. Salaries
2. Rent and utilities
3. Marketing expenses
o Depreciation and amortization (decrease in value of assets)
5. Operating Income (Gross profit minus operating expenses)
6. Non-operating Income and Expenses (Things not related to the main business)
o Interest income or expense
o Gains or losses from selling assets
7. Income Before Taxes
8. Income Tax Expense
9. Net Income (Net Profit) (Final profit after all expenses and taxes)

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