1 BUSINESS BUILDER 3 HOW TO PREPARE A PROFIT AND LOSS (INCOME) STATEMENT
2 zions business resource center 2 how to prepare a profit and loss (income) statement A Profit and Loss (P&L) or income statement measures a company s sales and expenses over a specified period of time. You can use this guide to create a profit and loss statement for your business. What You Should Know Before Getting Started The Purpose of a P&L Statement Why Prepare a P&L Statement? An Overview Sample of a P&L Statement How to Prepare a P&L Statement Net Sales Cost of Goods Sold Selling and Administrative Expenses Other Income and Other Expenses Conclusion Checklist Resources Twelve Month Profit and Loss Projection Glossary Notes
3 how to prepare a profit and loss (income) statement 3 what to expect This Business Builder will guide you through a step-by-step process to create a profit and loss statement for your business. what you should know before getting started The Purpose of a P&L Statement A Profit and Loss (P&L) statement measures a company s sales and expenses during a specified period of time. The function of a P&L statement is to total all sources of revenue and subtract all expenses related to the revenue. It shows a company s financial progress during the time period being examined. The P&L statement contains uniform categories of sales and expenses. The categories include net sales, cost of goods sold, gross margin, selling and administrative expenses (or operating expense) and net profit. These are categories that you will use when constructing a P&L statement. Since it is a rendering of sales and expenses, the P&L statement will give you a feel for the flow of cash into (and out of) your business. The P&L statement is also known as the income statement and the earnings statement. This Business Builder will explain, through a step-by-step process and the use of a worksheet, how to create a P&L statement. Accounting terms will be defined as they are introduced, and a glossary is included for your reference. This Business Builder will define and explain the data needed to put together a P&L statement, but before you start, it might be helpful to consider the following questions: If the P&L statement you develop is going to be of value, and acceptable to the Internal Revenue Service (IRS), the revenues and expenses reported during the period must match. That is, the expenses incurred to generate the sales of your product (or services) must be related to actual sales during the accounting period. Does your inventory method allow you to calculate or reasonably estimate the quantity and cost of goods sold during a specific time period? Do you have records of general and administrative expenses? Can you separate selling-related expenses from other expenses?
4 zions business resource center 4 Why Prepare a P&L Statement? There are two reasons to prepare a P&L statement. One reason is the P&L statement answers the question, Am I making any money? It is a valuable tool to monitor operations. A regularly prepared P&L statement either quarterly or monthly for new businesses will give owners timely and important information regarding revenues and expenses and tell them whether adjustments might be necessary to recoup losses or decrease expenses. The P&L statement also allows outsiders to evaluate your ability to manage and use your company s resources. The second reason to prepare a P&L statement is because it is required by the IRS. It is the record of a business operation that is used to assess taxes on profits earned. It is the only financial statement required by the IRS. An Overview The P&L statement uses data from your business and three simple calculations to tell you the net profit (or net loss) of your company. Usually, it helps to know where you are going before you get there, so here s a shell of a P&L statement and a completed P&L statement for the fictional ABC Company. Shell of a P&L statement: Net Sales Gross Margin - Selling and Administrative Expenses = Net Operating Profit Net Operating Profit + (Other Income - Other Expenses)= Net Profit Before Income Taxes Net Profit Before Taxes - Income Taxes = Net Profit (or Net Loss)
5 how to prepare a profit and loss (income) statement 5 Sample of a P&L statement: ABC Wholesale Company Profit and Loss Statement For the Quarter Ended March 31, 200X Net Sales Cost of Goods Sold: Beginning inventory Merchandise purchases Freight Cost of Goods Available For Sale Less ending inventory Cost of Goods Sold Gross Margin Selling, Administrative and General Expenses: Salaries and wages Rent Light, heat and power Other expenses State and local taxes and licenses Depreciation and amortization on leasehold improvements Repairs Total Selling, Administrative and General Expenses Profit From Operations Other income Other expenses Net Profit Before Taxes Provision for income tax Net Profit After Income Tax - 45, ,000-15,000-50,000-22,000-6,000-1,000-4,000-1, ,500 2, ,400 $200, , ,000 70,000-36,000 34,000 36,000 $21,600
6 zions business resource center 6 how to prepare a P&L statement The heading of the P&L statement should always tell the reader what period of time is being examined. Unlike a balance sheet, which is a snapshot of a company during a particular date in time, the P&L statement shows a listing of what has transpired or happened during a time period. As such, the heading should contain wording that describes the time period being examined, such as: for the month ending month/day/year; for the quarter ending month/day/year; for the year ending month/day/year. Step 1: Fill in the heading of your worksheet with your company s name and the period the P&L statement will reflect. The data items that you must be able to provide to construct a P&L statement are: Net Sales Cost of Goods Sold Selling and Administrative Expenses Other Income and Other Expense Net Sales Net sales are the total sales during the time period being analyzed minus any allowances for returns and trade discounts. The amount allowed for returns will vary considerably between different types of businesses. A small retail store may have a few returns compared to a manufacturing operation. It is commonly figured as a small percentage (1 percent or 2 percent) of total sales. An amount allowed for trade discounts recognizes the discrepancy between a standard or catalog price and the actual price paid by customers. An allowance for trade discounts decreases total sales to reflect prices actually paid. This is an important consideration if sales are recorded when the order is placed rather than when the goods are shipped or payment is received. The choice of when and how to record sales is a function of your bookkeeping/accounting system and the decisions made related to its setup. This Business Builder assumes that system is in place. Step 2: Fill in total sales, and any allowances on the worksheet. Calculate net sales.
7 how to prepare a profit and loss (income) statement 7 Cost of Goods Sold Cost of goods sold is also called the cost of sales. For retailers and wholesalers it is the total price paid for the products sold during the accounting period. It is just the price of the goods. It does not include selling or administrative expenses (these expenses are listed elsewhere on the P&L statement). For service and professional companies, there will be no cost of goods sold. These types of companies receive income from fees, commissions, and royalties and do not have inventories of goods. The costs to generate services will be included in the selling and administrative expense and the general expense sections of the income statement. For retailers and wholesalers, the cost of goods sold may be computed several different ways using either a direct or indirect method. This means it will be an actual accounting of the prices of goods sold based on inventory (direct) or an estimate by deduction (indirect), such as deflating sales. Most small retail and wholesale businesses will compute the cost of goods sold directly by taking the value of inventory at the beginning of the accounting period (original inventory), adding the value of goods purchased during the accounting period (new inventory) and then subtracting the value of the inventory on hand at the end of the accounting period (remaining inventory). These calculations will yield the amount of inventory consumed during the accounting period. For service and professional companies, there will be no cost of goods sold. Beginning Inventory + Inventory Purchased During the Period - Inventory on Hand at the End of the Period Inventory Used for Product During the Time Period
8 zions business resource center 8 Deflating Sales Figures A cost of goods sold could also be derived indirectly by deflating sales figures. For example, if a retail store has a storewide gross margin (or markup) of 40 percent and sales of $100,000 are recorded during the accounting period, the cost of goods sold would be $60,000. See the following calculation for how this works: Total Sales x Gross Margin (%) = Gross Margin ($) $100,000 x 40% = $40,000 Total Sales ($) - Gross Margin ($) = Cost of Goods Sold ($) $100,000 - $40,000 = $60,000 If the application of a uniform margin is inappropriate, product classes could be developed based on gross margins. That is, product group A would be all products with a gross margin of, say, 30 percent; product group B would be products with a gross margin of 25 percent; and product group C would be products with a gross margin of 10 percent. The calculations shown above would then be done for each product category and totaled. Manufacturer s Cost of Goods Sold For manufacturers, the method for compiling the cost of goods sold (or, more accurately, the cost of goods manufactured) is different than the way it is done for retailers and wholesalers. This is because a manufacturer s costs come from both the acquisition of raw materials to create a product and the costs related to its manufacture. For a manufacturer, the cost of goods sold is divided into two categories: direct costs and indirect costs. Direct costs include inventory costs based on beginning and ending inventories computed in the same manner as retailers, and it also includes the costs of raw material, and work-in-process inventories, plus direct labor costs. Direct labor is the cost of labor to convert raw materials into finished products. Indirect labor includes other factory personnel such as shipping personnel or maintenance workers. Indirect costs include indirect labor, factory overhead and materials and supplies. Because of these additions, the cost of goods manufactured is often compiled as a separate statement. Information from the separate statement is then incorporated into the P & L statement. Factory overhead includes the following: depreciation of plant and equipment; factory utilities such as light, heat and power; insurance; real estate taxes; and the wages of supervisors and others who do not work directly to create the product.
9 how to prepare a profit and loss (income) statement 9 Materials and supplies consumed in the production of goods are included in the direct cost of goods sold for manufacturers. Supplies that are not consumed during the manufacturing process are included as indirect costs. For manufacturers, if containers or packaging is an integral part of the product, then these expenses are included in the costs of goods sold. If they are not integral to the product, then these expenses would be recorded as selling expenses. Step 3: Fill in the cost of sales for your company on the worksheet. If you are a manufacturer, complete the separate Cost of Goods Manufactured Worksheet to make sure all applicable costs are accounted for. Transfer your costs of goods manufactured to the general worksheet and continue using the general worksheet to calculate the net income for your operation. Gross Margin Once net sales and cost of goods sold are entered on the P&L statement, it is possible to compute the gross margin for the accounting period. Gross margin is also referred to as gross profit. Step 4: Calculate the gross margin for your company. Net Sales - Cost of Goods Sold = Gross Margin Selling and Administrative Expenses Two types of expenses are recorded on a P&L statement for all types of companies: selling expenses and general and administrative expenses. Selling expenses are expenses incurred directly and indirectly in making sales. They include salespeople s salaries, sales office costs, commissions, advertising, warehousing and shipping. In general, selling expenses are the expenses of order taking and order fulfilling. For managerial purposes, general and administrative expenses are considered managed costs. They are controlled by the decisions of management and not directly tied to sales or production. General and administrative expenses are operating expenses not directly associated with the sale of goods. They include nonsales personnel salaries, supplies, and other operating costs necessary to the overall administration of the business. General and administrative expenses are commonly considered overhead expenses, and include rent, utilities, telephone, travel and supplies. Repairs and improvement expenses incurred for either equipment or property may also be deducted as an expense. However, this is only for expenses to maintain property or equipment such as roof repairs, repainting and other maintenance. Major overhauls of equipment or maintenance that extend the life of the asset must be capitalized (that is, depreciated over the asset s useful life and not deducted from income as an expense). For managerial purposes, general and administrative expenses are considered managed costs. They are controlled by the decisions of management and not directly tied to sales or production.
10 zions business resource center 10 Step 5: Fill in selling, general and administrative expenses for your business on the worksheet. Net operating profit is the difference between the gross margin and selling and administrative expenses. Gross Margin - Selling and Administrative Expenses = Net Operating Profit Step 6: On the worksheet, compute the net operating profit for your business. The last items on a P&L statement are: other income, other expenses and income taxes. Let s look first at other income and expenses. Other Income and Other Expense These are line items for any unusual income or expense items not directly related to the operations of the business. Other income includes income from interest, dividends, miscellaneous sales, rents, royalties and gains from the sale of capital assets. Other expenses is a line item to record any unexpected losses unrelated to the normal course of business. It could include a loss from the disposal of equipment. Other income is added to net operating profit and other expenses is subtracted from net operating profit to compute net profit before income taxes. Net Operating Profit + (Other Income - Other Expenses) = Net Profit Before Income Taxes Step 7: Enter any other income or other expenses for your business on the worksheet and calculate net profit before income taxes. Net Profit is calculated by subtracting what you estimate is owed for state and federal income taxes from Net Profit Before Income Taxes. Net Profit Before Income Taxes - Income Taxes = Net Profit Step 8: Calculate the net profit for your business. conclusion The creation of a profit and loss statement is an important event for a small business. At one glance, it provides a summary of the most important activities of the company. A P&L statement is the record of the good news of sales and the less propitious news of expenses. It provides valuable information to managers and owners including the costs of goods sold, gross margin, selling and administrative expenses and net profit. Compiled on a regular basis, the P&L statement is one of the most important tools for a small business owner to use to evaluate and make adjustments to operations.
11 how to prepare a profit and loss (income) statement 11 checklist Net Sales and Cost of Goods Sold Did you subtract an allowance for returns, transportation, and discounts from total sales? Are all appropriate costs included in the cost of goods sold? If you are a manufacturer, have you included labor costs, factory overhead, and inventory costs in the cost of goods sold? Selling Expenses and Net Profit Have selling expenses been separated from general and administrative expenses? Has any income or expenses from outside of the normal course of business been added to or subtracted from net operating profit to compute net profit? Are allowances for both state and federal taxes included in the deduction for income taxes? resources Books Analysis and Use of Financial Statements, 2nd ed., by Gerald I. White, Ashwinpaul C. Sondhi, and Dov Fried. (John Wiley & Sons, 1997). Corporate Controller s Handbook of Financial Management, 2nd ed., by Joel G. Siegel, Jae K. Shim, and Nicky A. Dauber. (Prentice Hall, 1997). Magazines Journal of Accountancy Other Sources Small Business Administration American Institute of Certified Public Accountants Writer: E. Bond Copyright Edward Lowe Foundation. All rights reserved. The text of this publication, or any part thereof, may not be reproduced in any manner whatsoever without written permission from the publisher.
12 zions business resource center 12 Twelve Month Profit and Loss Projection Revenue (Sales) Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 Category 7 Total Revenue (Sales) January February March April May Cost of Sales Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 Category 7 Total Cost of Sales Gross Profit Expenses Salary expenses Payroll expenses Outside services Supplies (office and operating) Repairs and maintenance Advertising Car, delivery and travel Accounting and legal Rent Telephone Utilities Insurance Taxes (real estate, etc.) Interest Depreciation Other expenses (specify) Other expenses (specify) Other expenses (specify) Misc. (unspecified) Total Expenses Net Profit
13 how to prepare a profit and loss (income) statement 13 June July August September October November December Yearly
14 zions business resource center 14 glossary Allowance for Returns - In the computation of net sales, an amount subtracted from sales to reflect returns of merchandise. Generally figured as a small percentage of sales. Cost of Goods Sold - Total price paid for products sold during the accounting period, plus transportation costs to acquire the goods. Service and professional companies will have no cost of goods sold, whereas manufacturers will have detailed statements. Direct labor - The cost of labor to convert raw materials into finished products. Direct labor is included in the cost of goods sold for manufacturers. Discounts - Allowance subtracted from total sales for trade discounts. Used in the calculation of net sales. General and Administrative Expense - Overhead expenses not directly associated with the sale of goods. Includes salaries (of nonsales personnel), rent, utilities, telephone, travel and supplies. Gross Margin - Net sales minus any adjustments for returns or discounts. Net Sales - Total sales minus any adjustments for returns or discounts. Selling Expense - Expenses related to order taking and product sales. Other Income - Income produced from other than the normal operations of the business. Includes interest, dividends, and gains from the sale of assets. Other Expenses - Expenses not incurred from normal operations. Can include losses on the sale of assets. Net Operating Profit - Gross margin minus selling and administrative expense. Net Profit Before Income Taxes - Net operating profit plus other income and minus other expense.
15 how to prepare a profit and loss (income) statement 15 notes
16 b-3 Zions Business Resource Center Utah com Idaho com zionsbank.com Member FDIC
business builder 3 how to prepare a profit and loss (income) statement amegy bank business resource center how to prepare a profit and loss (income) statement 2 how to prepare a profit and loss (income)
BUSINESS BUILDER 2 HOW TO PREPARE AND ANALYZE A BALANCE SHEET zions business resource center 2 how to prepare and analyze a balance sheet Examine the concepts of assets, liabilities, and net worth in a
Management Accounting 31 Financial Statements for Manufacturing Businesses Importance of Financial Statements Accounting plays a critical role in decision-making. Accounting provides the financial framework
BUSINESS BUILDER 7 HOW TO ANALYZE PROFITABILITY zions business resource center 2 how to analyze profitability Although pride of ownership and career satisfaction are healthy goals, generating profit is
Guide to Financial Ratios Analysis A Step by Step Guide to Balance Sheet and Profit and Loss Statement Analysis By BizMove Management Training Institute Other free books by BizMove that may interest you:
Instructions for E-PLAN Financial Planning Template The EPLAN template will assist you in preparing financial projections for your existing business. The template uses Microsoft Excel to prepare your projected
Recap from Week 3 The Measurement of the Business Income The primary objective of accounting is measuring the net income of the businesses according to the generally accepted accounting principles. Net
03-Seidman.qxd 5/15/04 11:52 AM Page 41 3 An Introduction to Business Financial Statements In this chapter, we build on the basic knowledge of how businesses are financed by looking at how firms organize
business builder 4 how to prepare a cash flow statement zions business resource center zions business resource center 2 how to prepare a cash flow statement A cash flow statement is important to your business
1 Building Blocks of Managerial Accounting CHAPTER 2 2 Distinguish among service, merchandising, and manufacturing companies OBJECTIVE 1 3 Service Companies Provide an intangible service only Largest sector
How to Analyze Profitability Peoples Bank Business Resource Center Business Builder 7 peoplesbancorp.com 800.374.6123 Table of Contents What to Expect... 4 What You Should Know Before Getting Started...
Financial Statement Review: Financial Statements Tutorial There are four major financial statements used to communicate information to external users (creditors, investors, suppliers, etc.) - 1. Balance
Lesson 5: Inventory 5.1 Introduction Whether it is a brick and mortar or digital store, for many businesses, inventory management is a key cog of their operations. Managing inventory is an important key
Chubb Group of Insurance Companies Business Income, Extra Expense and Research and Development Income Worksheet For Ongoing-Business with/without R&D Activities This worksheet will help you determine the
I. Merchandising Activities Products that a company acquires to resell to customers are referred to as merchandise (also called goods). A merchandiser earns net income by buying and selling merchandise.
Instructions for Page 4 of Application (FINANCIAL STATEMENTS) Part of determining whether an applicant is fit to become a household goods mover involves provision of information about financial capability.
Master Budgeting 1 The Basic Framework of Budgeting A budget is a detailed quantitative plan for acquiring and using financial and other resources over a specified forthcoming time period. 1. The act of
Fill in the Blanks Feasibility Study Worksheet The Arizona SBDC Network is partially funded through a cooperative agreement with the US Small Business Administration. The SBA s funding is not an endorsement
1. Managerial accounting: A. is governed by generally accepted accounting principles. B. places emphasis on special-purpose information. C. pertains to the entity as a whole and is highly aggregated. D.
CHAPTER 5 ACCOUNTING FOR MERCHANDISING OPERATIONS LEARNING OBJECTIVES 1. IDENTIFY THE DIFFERENCES BETWEEN SERVICE AND MERCHANDISING COMPANIES. 2. EXPLAIN THE RECORDING OF PURCHASES UNDER A PERPETUAL INVENTORY
Accounting Principles, 7 th Edition Weygandt Kieso Kimmel Income Statements Accounting for Merchandising Operations Prepared by Naomi Karolinski Monroe Community College and Marianne Bradford Bryant College
ACCOUNTING DICTIONARY A Account a record summarizing all the information pertaining to a single item in the accounting equation Account balance the amount in an account Account number the number assigned
Audit of the Inventory and Warehousing Cycle Chapter 21 2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 21-1 Learning Objective 1 Describe the business functions and the related
Lesson-13 Elements of Cost and Cost Sheet Learning Objectives To understand the elements of cost To classify overheads on different bases To prepare a cost sheet Elements of Cost Raw materials are converted
POLICY NUMBER: CAPITAL ASSETS PROGRAM (OUTPUT POLICY) OP 15 04 04 13 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. BUSINESS INCOME REPORT/WORKSHEET Name Location This worksheet must be
Cash Flow Forecasting & Break-Even Analysis 1. Cash Flow Cash Flow Projections What is cash flow? Cash flow is an estimate of the timing of when the cash associated with sales will be received and when
0 Learning Objectives: 14.1 Describe the important of accounting and financial information. 14.2 Differentiate between managerial and financial accounting. 14.3 Identify the six steps of the accounting
Dr. Baldwin AC 314 Chapter 2 2-16 (15 min.) Computing and interpreting manufacturing unit costs. 1. (in millions) Supreme Deluxe Regular Total Direct material cost $ 84.00 $ 54.00 $ 62.00 $200.00 Direct
CHAPTER 19 Managerial Accounting ASSIGNMENT CLASSIFICATION TABLE Study Objectives Questions Brief Exercises Exercises A Problems B Problems *1. Explain the distinguishing features of managerial accounting.
Accounting II True/False Indicate whether the sentence or statement is true or false. 1. A set of procedures for controlling cash payments by preparing and approving vouchers before payments are made is
23 The Statement of Cash Flows Direct Method DEMONSTRATION PROBLEM The financial statements of Bolero Corporation follow. Copyright Houghton Mifflin Company. All rights reserved. 1 Bolero Corporation Income
Financial Statements The financial information forms the basis of financial planning, analysis & decision making for an organization or an individual. Financial information is needed to predict, compare
5-Year County-Level Financial Profile Industry Report Architectural Services (SIC Code: 8712) in Prince George County, Maryland Sales Range: $500,000 - $999,999 Date: 11/07/08 Report Description This 5-Year
Dollars and Sense Introduction Your dream is to operate a profitable business and make a good living. Before you open, however, you want some indication that your business will be profitable, if not immediately
Accounting Practice Questions 1) The fundamental accounting equation states that: a) assets = liabilities + owner s equity b) assets = liabilities + drawings c) assets = liabilities + net income d) assets
Module 2: Job-order costing Required reading Overview Chapter 3, pages 69-99 This module introduces the distinctions between two methods of determining unit costs of production joborder costing and process
A Account A record of a business transaction. A contract arrangement, written or unwritten, to purchase and take delivery with payment to be made later as arranged. Accounts payable Money which you owe
Page 1 of 21 TEST BANK > CONTROL PANEL > POOL MANAGER > POOL CANVAS Pool Canvas Add, modify, and remove questions. Select a question type from the Add Question drop-down list and click Go to add questions.
Accounting Basics for Contractors: Transforming Financial Statements into Management Tools March 2, 2010 John Garofalo General Partner, John N. Garofalo & Associates firstname.lastname@example.org; 713-857-9701
This is How Are Operating Budgets Created?, chapter 9 from the book Accounting for Managers (index.html) (v. 1.0). This book is licensed under a Creative Commons by-nc-sa 3.0 (http://creativecommons.org/licenses/by-nc-sa/
ACCRUAL BASIS JUDGE: UNITED STATES BANKRUPTCY COURT NORTHERN & EASTERN DISTRICTS OF TEXAS REGION 6 MONTHLY OPERATING REPORT MONTH ENDING: MONTH YEAR IN ACCORDANCE WITH TITLE 28, SECTION 1746, OF THE UNITED
Chapter 14 Managerial Accounting Concepts and Principles QUESTIONS 1. The managerial accountant plays an important role in preparing the information necessary for effective planning and control decisions.
Understanding Basic Financial Statements During the accounting cycle, the accounting system is used to track, organize and record the financial transactions of an organization. At the close of each period,
CHAPTER19 Managerial Accounting Acct202 19-1 PreviewofCHAPTER19 19-2 Managerial Accounting Basics Managerial accounting, a field of accounting that provides economic and financial information for managers
Brief Exercise 1-1 (15 minutes) 1. The cost of a hard-drive installed in a computer: direct materials cost. 2. The cost of advertising in the Puget Sound Computer User newspaper: selling cost. 3. The wages
6.1 COSTS AND COSTING 6 UNIT COST CALCULATIONS AND THE BREAK EVEN..... Working Out Costs - The Terminology How To Work Out Your Break Even Point Costing And Break Even Exercise Costing The Job Exercises
Export Business Plan Guide Table of Contents Introduction... 4 SECTION 01: CURRENT SITUATION ANALYSIS... 5 Company Overview... 5 Availability of Resources... 6 SWOT Analysis... 9 SECTION 02: MARKET ANALYSIS...
Guide to Financial Statements Study Guide Overview (Topic 1) Three major financial statements: The Income Statement The Balance Sheet The Cash Flow Statement Objectives: Explain the underlying equation
CASH FLOW STATEMENT & BALANCE SHEET GUIDE The Agriculture Development Council requires the submission of a cash flow statement and balance sheet that provide annual financial projections for the business
CASH FLOW STATEMENT (AND FINANCIAL STATEMENT) - At the most fundamental level, firms do two different things: (i) They generate cash (ii) They spend it. Cash is generated by selling a product, an asset
BUSINESS BUILDER 6 HOW TO ANALYZE YOUR BUSINESS USING FINANCIAL RATIOS zions business resource center 2 how to analyze your business using financial ratios Using a sample income statement and balance sheet,
Chapter 6 Statement of Cash Flows The Statement of Cash Flows describes the cash inflows and outflows for the firm based upon three categories of activities. Operating Activities: Generally include transactions
8 Accounting Standard (AS) 2 Valuation of Inventories Contents OBJECTIVE SCOPE Paragraphs 1-2 DEFINITIONS 3-4 MEASUREMENT OF INVENTORIES 5-25 Cost of Inventories 6-13 Costs of Purchase 7 Costs of Conversion
LEBANESE ASSOCIATION OF CERTIFIED PUBLIC ACCOUNTANTS MANAGERIAL ACCOUNTING JULY 2015 MULTIPLE CHOICE QUESTIONS (37.5%) Choose the correct answer 1. All of the following statements concerning standard costs
Management Accounting 137 Comprehensive Business Budgeting Goals and Objectives Profit planning, commonly called master budgeting or comprehensive business budgeting, is one of the more important techniques
FINANCIAL INTRODUCTION In earlier sections you calculated your cost of goods sold, overhead expenses and capital cost in order to help you determine the sales price of your product. In your business plan,
Suggested layouts for financial statements in Accounting Courses National 5 and Higher The following suggested layouts may be used when presenting financial statements in the Accounting Courses for National
CHAPTER 1 Managerial Accounting ASSIGNMENT CLASSIFICATION TABLE Learning Objectives Questions Brief Exercises Do It! Exercises A Problems B Problems *1. Explain the distinguishing features of managerial
CHAPTER 12 Cost Sheet ( or) Statement of Cost Introduction ELEMENTS OF COST Elements of cost are necessary to have a proper classification and analysis of total cost. Thus, elements of cost provide the
Form 1120 Department of the Treasury Internal Revenue Service A Check if: 1a Consolidated return (attach Form 851). b Life/nonlife consolidated return... 2 Personal holding co. (attach Sch. PH).. 3 Personal
Merchandise Accounts Chapter 7 - Unit 14 Merchandising... Merchandising... There are many types of companies out there Merchandising... There are many types of companies out there Service company - sells
29 COST SHEET You are running a factory which manufactures electronic toys. You incur expenses on raw material, labour and other expenses which can be directly attibuted to cost and which cannot be directly
Planning your cash flow Business Coach series Preparing the cash flow forecast Keeping on track Business Coach series The cash flow process The situation Money goes out earlier and faster than it comes
www.xtremepapers.com INTERNATIONAL ACCOUNTING STANDARDS CIE Guidance for teachers of 7110 Principles of Accounts and 0452 Accounting 1 CONTENTS Introduction...3 Use of this document... 3 Users of financial
EXERCISES Ex. 14 1 There were net additions, such as depreciation and amortization of intangible assets of $389 million, to the net loss reported on the income statement to convert the net loss from the
Chapter 14 1 Identify the purposes of the statement of cash flows Distinguish among operating, investing, and financing cash flows Prepare the statement of cash flows by the indirect method Identify noncash
Sample Test for entrance into Acct 3110 and Acct 3310 1. Which of the following financial statements could properly have the following in the date line: For the Year Ended December 31, 2010"? a. Balance
Chapter 4 Exercises and Problems Exercise 4 2 Requirement 1 GENERAL LIGHTING CORPORATION Income Statement Revenues and gains: Sales... $2,350,000 Rental revenue... 80,000 Total revenues and gains... 2,430,000
Financial Statements LESSON 15 Main Idea Business owners must have accurate and timely information about the fi nancial status of their business to make the best decisions. Most of this fi nancial information
Finance 1 (FIN-1) RENAISSANCE ENTREPRENEURSHIP CENTER (FIN-1) Learning Outcomes At the conclusion of this class, you should: Know what will be covered in the six finance class sessions. Have reviewed some
ILLUSTRATION 24-1 OPERATING, INVESTING, AND FINANCING ACTIVITIES COMPONENTS OF THE STATEMENT OF CASH FLOWS CASH FLOWS FROM OPERATING ACTIVITIES + Sales and Service Revenue Received Cost of Sales Paid Selling
THE BUSINESS ENTERPRISE CENTRE S GUIDE TO PROJECTING YOUR CASH FLOW The Business Enterprise Centre is a member of Last updated 16 Jan 2015 TD Page 1 of 26 Preface A cash flow statement reports the outflow
South Eastern Economic Development SEED Corporation 80 Dean Street (Route 44), Taunton, MA 02780 SEED is a non profit finance corporation certified and accredited by the U.S. Small Business Administration
Multiple Choice Questions 1. The financial statement summarizing the value of a firm's equity on a particular date is the: a. income statement. B. balance sheet. c. statement of cash flows. d. cash flow
New York StartUP! Business Plan Competition Developing Financial Statements Presented by Paisley Demby, CEO PBN Consulting, LLC www.pbnconsulting.com 1 Invitation to Tweet #2015NYStartUp PaisleyDemby Contents
MYOB US, Inc. April 2002 Accounting 101 Like all small business owners, you went into business with a dream: to sell your unique product or services and make a living for you, your family, and your employees.