Understanding Finance - A Guide to Financial Statements

Overview

The goal of any business is to make a profit, generate enough cash to operate efficiently, and be financially viable. Financial statements are used to track a company’s financial information. There are three basic financial statements used for this purpose: Income statement, Cash flow statement and balance sheet. In this course, you’ll learn about each of the three financial statements, their reporting requirements, and how the information is arranged in them. You will also examine some examples of financial statements and consider how each financial statement relates to the others.

Objectives

• Recognition of the four types of financial data included in an income statement and the purpose of each
• Recognition of the method of calculating gross profit and income using the income statement
• Identification of cash flow management strategies each cash flow statement
• recognizing how cash flow values are calculated using the cash flow statement
• recognizing how financial transactions influence a company’s financial situation in a particular scenario
• recognizing how to make a balance sheet
• recognizing the impact of a transaction on the income statement, cash flow statement and balance sheet