Financial Fundamentals and Statements

Assets = Resources owned by a company Liabilities = Obligations or debts owed by a company Equity = Ownership interest in a company Cash Flow = Movement of money in and out of a business

Operating Activities = Cash flows from everyday operations Financing Activities = Cash flows related to borrowing and repaying debts Investing Activities = Cash flows from the acquisition and sale of assets Functional Cash Flow = Cash flow categorized by its function within the business

Current Assets = Assets expected to be converted into cash within one year Long-term Assets = Assets intended to be held for more than a year Marketable Investments = Investments that can be quickly converted to cash Household Assets = Assets owned by individuals or families

<p>Balance Sheet = Snapshot of a company's financial position at a specific point in time Cash Flow Statement = Summary of cash inflows and outflows over a period Statement of Financial Position = Another name for a balance sheet Pro Forma Statements = Projected financial statements based on assumptions</p> Signup and view all the answers

<p>Household Equity = Value of household assets minus liabilities Household Net Worth = Total assets owned by a household Savings = Money set aside for future use Human-Related Assets = Skills and health contributing to household productivity</p> Signup and view all the answers

<p>Cash flow statement = Shows the inflows and outflows of cash over a period Functional cash flow statement = Focuses on cash flow from operational activities Traditional cash flow statement = Typically follows a standard format for reporting Pro forma statements = Projected financial statements based on assumptions</p> Signup and view all the answers

<p>Current assets = Assets expected to be converted to cash within a year Long-term assets = Assets that provide value over more than one year Human-related assets = Non-physical assets related to employee capabilities Marketable investments = Financial assets that can be easily sold in the market</p> Signup and view all the answers

<p>Net cash flow = Total cash inflows minus total cash outflows Net working capital = Current assets minus current liabilities Capital expenditures = Funds used to acquire or upgrade physical assets Depreciation = Reduction in the value of an asset over time</p> Signup and view all the answers

<p>Household net worth = Total assets owned by a household minus total liabilities Household equity = Value of ownership interest in household assets Household assets = All the valuable resources owned by a household Savings = The portion of income not spent on current consumption</p> Signup and view all the answers

<p>Balance sheet = Snapshot of a company’s financial position at a specific time Statement of financial position = Details assets, liabilities, and equity Cash flow statement = Tracks cash inflows and outflows over a period Statement of cash flow = Similar to the cash flow statement, detailing cash transactions</p> Signup and view all the answers

<p>Cash flow statement = A report showing the cash inflows and outflows during a period Operating activities = Primary revenue-generating activities of the business Financing activities = Transactions that result in changes to the equity and borrowings of the entity Depreciation = The allocation of the cost of a tangible asset over its useful life</p> Signup and view all the answers

<p>Current assets = Assets expected to be converted to cash or used within one year Long-term assets = Assets that are not expected to be converted to cash within one year Household assets = Assets owned by individuals or families Human-related assets = Skills or intellectual contributions of employees to an organization</p> Signup and view all the answers

<p>Net cash flow = The difference between cash inflows and cash outflows Capital expenditures = Funds used by a company to acquire or upgrade physical assets Household net worth = The difference between total assets and total liabilities of a household Pro forma statements = Financial reports prepared based on hypothetical scenarios</p> Signup and view all the answers

<p>Statement of cash flow = Tracks the flow of cash within a business Balance sheet = Displays a company's assets, liabilities, and equity at a specific point in time Statement of financial position = Another term for balance sheet but emphasizes the financial status Traditional cash flow statement = Focuses on cash flow from operating, investing, and financing activities in a typical format</p> Signup and view all the answers

<p>Marketable investments = Investments that can be easily converted into cash Savings = Funds set aside for future use, often in a bank account Net working capital = The difference between current assets and current liabilities Functional cash flow statement = A cash flow statement that provides detailed cash flow information by functional categories</p> Signup and view all the answers