THE RESOURCE FOR CORPORATE FINANCE, ACCOUNTING & TREASURY PROFESSIONALS

Balance Sheet/Income Statement/Cash Flow

Instructor: Lynn Fountain

Term Page Definition

7 The balance sheet is a report that summarizes all of an entity's
Balance assets, liabilities, and equity as of a given point in time. It is
Sheet typically used by lenders, investors, and creditors to estimate the
liquidity of a business.
Net Worth 7 Net worth is a concept applicable to individuals and businesses
as a key measure of how much an entity is worth. A consistent
increase in net worth indicates good financial health; conversely,
net worth may be depleted by annual operating losses or a
substantial decrease in asset values relative to liabilities.
Assets 8 A resource with economic value that an individual, corporation or
country owns or controls with the expectation that it will provide
future benefit. 2. A balance sheet item representing what a firm
owns.
Liabilities 8 Liabilities are a vital aspect of a company's operations because
they are used to finance operations and pay for large expansions.
They can also make transactions between businesses more
efficient. For example, the outstanding money that a company
owes to its suppliers would be considered a liability.

Owners 9 Owner's equity is officially defined as: The residual interest in the
Equity assets of the enterprise after deducting all its liabilities.
Classified 14 A balance sheet with classifications (groupings or categories)
Balance such as current assets, property plant and equipment, current
Sheet liabilities, long term liabilities, etc.
Unclassified 14 An unclassified balance sheet does not group asset and liability
Balance accounts into categories. Instead, an unclassified balance sheet
Sheet lists all assets in order of liquidity starting with assets like cash
and accounts receivable. The liabilities are listed in order of term.
Short-term liabilities like accounts payable are listed first followed
by long-term debt.
Income 16 financial statement that measures a company's financial
Statement performance over a specific accounting period. Financial
performance is assessed by giving a summary of how the
business incurs its revenues and expenses through both
operating and non-operating activities.
Gross 18
Revenues Total revenue received before any deductions or allowances, as
for rent, cost of goods sold, taxes, etc.
Cost of Sales 18 The cost of sales is the accumulated total of all costs used to

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THE RESOURCE FOR CORPORATE FINANCE, ACCOUNTING & TREASURY PROFESSIONALS

create a product or service, which has been sold.

Gross Profit 18 Gross profit is a company's residual profit after selling a product
or service and deducting the cost associated with its production
and sale.
Operating 19 A category of expenditure that a business incurs as a result of
Expenditures performing its normal business operations.
Retained 21 The percentage of net earnings not paid out as dividends, but
Earnings retained by the company to be reinvested in its core business, or
to pay debt. It is recorded under shareholders' equity on the
balance sheet.
Cash Flow 23 A cash flow statement, also known as statement of cash flows, is
Statement a financial statement that shows how changes in balance sheet
accounts and income affect cash and cash equivalents, and
breaks the analysis down to operating, investing and financing
activities.
BS 24 Abbreviation for Balance Sheet
IS 24 Abbreviation for Income Statement
NI 25 Abbreviation for Net Income

LT 26 Abbreviation for Long-term

MD&A 28 Abbreviation for management discussion and analysis
SOX 29 Abbreviation for Sarbanes-Oxley
FS 31 Abbreviation for Financial Statement
SEC 32 Abbreviations for Securities and Exchange Commission

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