Term
| What do balance sheets show? How so? |
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Definition
| Balance sheets show what a company owns and what it owes at a fixed point in time; by giving detailed information about a company’s assets, liabilities and shareholders’ equity. |
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Term
| What do income statements show? How so? |
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Definition
| Income statements are reports that show how much revenue a company earned/spent over a specific time period(usually a (or portion of a)year. The literal “bottom line” of the statement usually shows the company’s net earnings or losses (how much the company earned or lost over the period. ) |
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Term
| What does cash flow statements show? |
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Definition
| Cash flow statements show the exchange of money between a company and the outside world also over a period of time. |
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Term
| What do statements of shareholders' equity show? |
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Definition
| statements of shareholders’ equity show changes in the interests of the company’s shareholders over time. |
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Term
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Definition
Assets are things that a company owns that have value.
This typically means they can either be sold or used by the company to make products or provide services that can be sold. Assets include physical property, such as plants, trucks, equipment and inventory. It also includes things that can’t be touched but nevertheless exist and have value, such as trademarks and patents. And cash itself is an asset. So are investments a company makes. |
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Term
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Definition
| Liabilities are amounts of money that a company owes to others. This can include all kinds of obligations, like money borrowed from a bank to launch a new product, rent for use of a building, money owed to suppliers for materials, payroll a company owes to its employees, environmental cleanup costs, or taxes owed to the government. Liabilities also include obligations to provide goods or services to customers in the future. |
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Term
| What is Shareholders’ equity> |
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Definition
| Shareholders’ equity is sometimes called capital or net worth. It’s the money that would be left if a company sold all of its assets and paid off all of its liabilities. This leftover money belongs to the shareholders, or the owners, of the company. |
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Term
| What formula summarizes what a balance sheet shows? |
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Definition
| ASSETS = LIABILITIES + SHAREHOLDERS' EQUITY |
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