Adventis FMC Level 1
1. financial statement commu- - financial condition
nicates what? - results of operations
- various other activities of an organization
2. how board of directors use - hold management accountable - make board-level decisions
financial data... about corporate strategy
3. how company management - measure performance
uses financial data... - make strategic, operating and financial decisions
4. how creditors use financial - measure creditworthiness
data... - liquidity
- bankruptcy risk
5. how investors use financial make decisions on buying/selling equity investments
data...
6. how acquirers use financial - determine valuation
data... - make investment decisions
7. how regulators use financial determine whether company is operating according to regula-
data... tions/law
8. what does the income state- results of operations over a period of time
ment present?
9. what is the purpose of the in- to show whether the company made or lost money during the
come statement? period reported
10. what does the income state- how revenues are translated into net income through subtract-
ment indicate? ing expenses
11. revenue (sales) amount charged for the delivery of goods or services
, Adventis FMC Level 1
12. cost of sales (cogs) - direct cost of producing revenue
- Ex: raw materials, direct wages, etc.
13. gross profit - revenue - cogs
- indicates how eflciently labor and materials are used in the
production process
14. operating expenses - all other expenses required to run a business
- Ex: management salaries, marketing, travel, etc.
15. operating income (EBIT) - revenue - cogs - operating expenses
- indicates a company's earning power from ongoing opera-
tions
16. non-operating expenses - expenses not related to regular business of the company
- Ex: interest expense, restructuring expense, etc.
17. corporate taxes local and federal income taxes the company incurs
18. net income (net earnings) - revenue - cogs - operating expenses - non-operating expenses
- taxes
- indicates increase in shareholders' value resulting from oper-
ations
19. what does the balance sheet an organization's financial position at a particular point in time
show?
20. what does the balance sheet - the resources an organization controls (assets)
disclose? - the claims on those resources (liabilities and equity)
21. what is the basic accounting assets = liabilities + equity
equation?
22. the double entry bookkeeping system
1. financial statement commu- - financial condition
nicates what? - results of operations
- various other activities of an organization
2. how board of directors use - hold management accountable - make board-level decisions
financial data... about corporate strategy
3. how company management - measure performance
uses financial data... - make strategic, operating and financial decisions
4. how creditors use financial - measure creditworthiness
data... - liquidity
- bankruptcy risk
5. how investors use financial make decisions on buying/selling equity investments
data...
6. how acquirers use financial - determine valuation
data... - make investment decisions
7. how regulators use financial determine whether company is operating according to regula-
data... tions/law
8. what does the income state- results of operations over a period of time
ment present?
9. what is the purpose of the in- to show whether the company made or lost money during the
come statement? period reported
10. what does the income state- how revenues are translated into net income through subtract-
ment indicate? ing expenses
11. revenue (sales) amount charged for the delivery of goods or services
, Adventis FMC Level 1
12. cost of sales (cogs) - direct cost of producing revenue
- Ex: raw materials, direct wages, etc.
13. gross profit - revenue - cogs
- indicates how eflciently labor and materials are used in the
production process
14. operating expenses - all other expenses required to run a business
- Ex: management salaries, marketing, travel, etc.
15. operating income (EBIT) - revenue - cogs - operating expenses
- indicates a company's earning power from ongoing opera-
tions
16. non-operating expenses - expenses not related to regular business of the company
- Ex: interest expense, restructuring expense, etc.
17. corporate taxes local and federal income taxes the company incurs
18. net income (net earnings) - revenue - cogs - operating expenses - non-operating expenses
- taxes
- indicates increase in shareholders' value resulting from oper-
ations
19. what does the balance sheet an organization's financial position at a particular point in time
show?
20. what does the balance sheet - the resources an organization controls (assets)
disclose? - the claims on those resources (liabilities and equity)
21. what is the basic accounting assets = liabilities + equity
equation?
22. the double entry bookkeeping system
