| A | B |
|---|
| Current Assets | Are those assets that will be converted into cash or expire, that is, be used up, within the longer of one year or the company's normal operating cycle |
| Property, plant, and equipment... | Includes assets with useful lives of more than one year that will be used by the business to generate revenue= The amount is ALWAYS reported net of accumulated depreciation |
| Intangible Assets | Have no physical existence and usually have a long useful life, therefore they are difficult to deal with= Intangible assets include items like patents, copyrights, trademarks, goodwill, and franchises= Are reported net of related amortization |
| Current Liabilities | Are obligations that will be paid with current assets, normally within 1 year |
| Long-term Liabilities | Are debts that have maturity dates extending beyond 1 year from the balance sheet date= Normally bear interest (there isn't a $ amount associated with contingencies and commitments; rather, we describe these 2 types of items in the NOTES to our financial statements) |
| Contributed Capital | Is normally shown in 2 accounts= First is the common stock account= Second is additional paid-in capital |
| Retained Earnings Account= ? | [Represents the balance of all of the earnings of the company] LESS [the total of the dividends declared since inception of operation] |
| Classified Income Statement: | 1) Continuing Operations= 2) Nonrecurring Items= 2a) Discontinued Operations= 2b) Extraordinary Items= 3) Earnings per share |
| Net Sales= ? | [Gross sales] - [any sales discounts] - [any sales returns] - [any sales allowances for the period] |
| Gross Profit= ? | [Net Sales] - [Cost of goods sold] |
| Cost of goods sold | Represents the inventory items that have been sold to customers |
| Basic Earnings Per Share= ? | [Net Income available to common shareholders] / [weighted average # of shares outstanding during the reporting period] |
| Net Income Available to Common Shareholders= ? | [Net Income] - [Dividends on preferred stock] |
| ****SLIDE 25***** | ****SLIDE 25***** |
| Return on Equity=? | [Net Income] / [Average Stockholders' Equity] |
| Average Stockholders' Equity=? | [Beginning Equity + Ending Equity] / 2 |
| Return on Equity=? | [Net Income] / [{Beginning Equity + Ending Equity} / 2] |
| Return on Equity=? | [Net Profit Margin] X [Asset Turnover] X [Financial Leverage] |
| Net Profit Margin=? | [Net Income] / [Net Sales] |
| Asset Turnover=? | [Net Sales] / [Average Total Assets] |
| Financial Leverage=? | [Average Total Assets] / [Stockholders' Equity] |
