中山大学会计基础L.ppt

Lesson 9 Financial Statements,Task Team of FUNDAMENTAL ACCOUNTING School of Business, Sun Yat-sen University,2,Outlines,A General View of Financial statements Income statement Balance sheet Statement of owners equity A Simple Illustration,3,Opening Story,Show me the money!,Cuba Gooding Jr. uttered an immortal line in the movie Jerry Maguire, “Show me the money!” Well, that is what financial statements do. They show you the money.,The questions are: Do they show you where a companys money came from? Do they show you where it went, and where it is now. How accountants make all these ends satisfied?,4,General View of Financial statements: GAAP,Statement of Financial Position (Balance Sheet). Income Statement. Statement of Cash Flows.,5,General View of Financial statements: Stock vs. Flow,Stock/ resources and obligations at a point in time: Balance sheet. Flow/activity over a period of time: Income statement. Statement of cash flows.,6,Financial Statement Objectives,Useful for investment decisions. (All financial statements) Comprehensible. (All financial statements) About economic resources and claims on resources (Balance Sheet). About financial performance during a period (Income Statement). About cash flows (Statement of Cash Flows).,7,General View of Financial statements: a Comparison,8,General View of Financial statements: Brief Comments,The financial statements are a picture of the company in financial terms.,Each financial statement relates to a specific date or covers a particular period.,9,Information Disclosed on Financial Statements,10,Information Disclosed on Financial Statements (cont),11,Income Statement,Also called: Profit & Loss statement = P&L statement = statement of earnings = statement of operations Technically subordinate to BS. Shows detail of changes to RE. Many investors consider IS more important than BS. Variations in format.,12,Parts of Income Statement,Heading: Name of entity. Name of statement Time period covered. Revenues. Cost of Sales. Gross Margin. Expenses. Net Income,13,Revenues in Income Statement,Several separate revenue items or net. Net sales = gross sales - sales returns and allowances - sales or cash discounts. Trade discounts not shown. Excludes sales or excise taxes collected for government. Other revenues (from activities not associated with sales of entitys goods/services) may be included in net sales or shown separately.,14,Expenses on Income Statement,Cost of Sales (or cost of goods sold). Associated with a decrease in the asset inventory. Gross margin = gross profit = Sales - COGS. May or may not be shown. Separate disclosure of: Research & development expenses. Interest expense.,15,Income Statement Format,Operating income may be shown before Other income and expense. Net income = Income before taxes Income tax expense. Income before taxes = Operating income adjusted for other revenues and expenses.,16,Example of Income Statement,17,Example of Income Statement (cont),18,Example of Income Statement (cont),19,Balance Sheet,Point in time or status report. More formally, Statement of Financial Position. Contains (and shows equality of amounts of): Assets. Liabilities and Owners equity.,20,Beauty Photo Store: Balance Sheet,21,Assets,Assets are properties or economic resources owned by a business They are expected to provide future benefits to the business.,22,Liabilities,Liabilities are obligations of the business. They are claims against the assets of the business.,23,Equity,Equity is the owners claim on the assets of the business. It is the residual interest in he assets of the business after deducting liabilities,24,An Illustration of Balance Sheet,25,An Illustration of Balance Sheet (cont),26,An Illustration of Balance Sheet (cont),27,An Illustration of Balance Sheet (cont),28,Flow Statements,Explains changes between the dates of the two balance sheet snapshots. 2 types of flow statements: Income statement (and related statement of retained earnings). Reconciles change in RE. Statement of Cash Flows. Reconciles changes in cash.,29,Statement of Cash Flows,Accounts provide information summarized in balance sheet and income statement. Third statement required by GAAP. Does not affect the way transactions are recorded. Derived from data reported in other financial statements.,30,The Statement of Cash Flows,The statement of cash flows reports the companys cash inflows and outflows from operating, investing, and financing activities.,31,Statement of cash flows,Provides info about cash flows associated with the periods operations and investing and financing activities. Numbers on cash flow statement are objective: cash is cash. Eliminates judgments and estimates involved with accrual accounting and the income statement and balance sheet.,32,Statement of Cash Flows: 2 Categories of Activities,Sources = activities that generate cash. Uses = activities that involve spending cash,33,Sources,Operations. New borrowings. New stock issues. Sale of property, plant, and equipment. Sale of other non-current assets.,34,Uses,Cash dividends. Repayment of borrowings. Repurchase of stock. Purchase of property, plant, and equipment. Purchase of non-current assets.,35,Illustration: Statement of Cash Flows,36,Illustration (cont): Statement of Cash Flows,37,Illustration (cont): Statement of Cash Flows,38,Illustration (cont): Statement of Cash Flows,39,Statement of owners equity,The statement of owners equity reports on changes in equity over the reporting period. Start with beginning equity Adjust for events : Increase: Investments by owner Net income decrease: Owner withdrawals Net loss,40,Two Categories of Shareholders Equity,Paid-in or contributed capital. Retained earnings.,41,Balance Sheet and Changes in Equity,42,43,Beauty Photo Store: Statement of Owners Equity,44,Summary,There are two major types of financial statements-stock reports and flow reports Financial statement can serve as an important device to disclose information to investors in order for them to make better decisions Four major financial statements are compared, explained and illustrated in this lesson,45,Case f