Module 1: L'entreprise et le circuit financier

A financial statement that shows the movement of cash both into and out of a company over a period of time.

Profit reflects revenues and expenses, while cash flow considers cash inflows and outflows; they are not the same.

Cash inflows and outflows directly related to the core business operations.

Cash inflows and outflows related to the purchase or sale of long-term assets.

Cash inflows and outflows related to obtaining or repaying funds (debt or equity) from investors.

Profit measures a company's success in a period, focusing on revenue and expenses, while cash flow focuses on cash inflows and outflows, not all equal.

Balanace sheet show what the company owns and what it owes; cash flow shows the movement of cash over a period of time.

Financing method provided by company owners (shareholders). The amount is not repaid. It's available for the company's entire lifetime, with shareholders controlling decisions & usage.

Money borrowed from banks. Repaid with interest at a fixed date. Banks don't control company decisions.

Funds used to acquire assets. Assets are funded by equity and debt.

Difference between revenue from sales and costs of producing/selling goods or services.

Final amount of profit after all expenses are deducted (taxes, bank interest). Distributed to owners as dividends or reinvested within the company.

Distribution of some net income to shareholders as payment.

Portion of net income not distributed as dividends, reinvested in the company to grow its capital.

The owners' stake in the company, representing the net assets after deducting liabilities.

Company's debts to lenders, encompassing bank loans, accounts payable & any other owes.

Net income represents the complete return for shareholders, even though they may not receive it all as dividends.

Reserves represent retained earnings, a part of net income not distributed as dividends.

Loan repayments are not considered part of the operating result, as loans are often recycled.

High operating result doesn't guarantee high investment return; look at assets invested, too.

Accounts receivable are assets because they show money the company is owed from customers.

Assets are items a company owns, including fixed assets (e.g., machinery) and current assets (e.g., stocks).

Cash represents liquid assets allowing a company to pay for day-to-day operations.

Financial return is calculated by comparing earnings to investment; this ratio helps assess the profitability of an investment.

Long-term assets used in the production of goods or services.

Current assets involved in day-to-day running of the company

Unpaid amounts that can be used to fund company assets, like increasing capital.

How easily an asset can be bought or sold quickly & how it quickly generates cash.

Total liabilities = total equity + total liabilities; a fundamental accounting principle.

Inability to pay debts when due, due to insufficient liquid assets.

Inability to pay debts when due, even after selling all assets.

High net income doesn't guarantee high profitability. Profitability also depends on the capital invested by shareholders.

High revenue doesn't automatically translate to high profitability. Net income also needs to be considered in the calculation of profitability.

A company's financing structure (debt vs. equity) impacts profitability, influencing taxable income and ultimately impacting tax payments.

Debt can lower taxable income, reducing tax obligations, and can also be used to fund long-term assets (machinery, buildings).

The income statement's two sides (revenues and expenses) must always balance, with the difference being the net income.

Assets, on the balance sheet, are ordered by their liquidity from least liquid (e.g., property, plant, and equipment) to most liquid (e.g., cash).

Liabilities are ordered by their due date from those due immediately to those due in the distant future (e.g., long-term debt).

Equity is composed of capital, reserves (accumulated profits), profits or losses, investment grants, and provisions.

Different equity components have different origins and roles, reflecting various contributions to the company.

Net income (or net profit) is the final profit amount after all expenses are subtracted from total revenue, including taxes and interest.