CH2 : Fin statement ,
Cash Flow
Balance sheet
/ Liability
Assets
1. : +
Equity
when balance
analyzing sheet , 3 concerns :
Accounting liquidity
& Debt
value
vs
vs
equity
cost
be
-
Liquidity : How
easy assets can converted
to cash .
current assets (CA) : cast & assets can be
-
turned into cast win a
year from date of
balance sheet
t
Accounts receivable (AR) : amt not yet collected
- Inventory
+ Fixed assets least :
liquid assets
·
Tangible fixed assets :
property ,
plant equipment,
·
Intangible trademark , patent.
+
liabilities = debt >
- debt services :
put firm
in
default contract if they're not paid .
+
Equity
↑
residual
when
: Not fixed .
retained
,
earnings are added.
interest
7 +
value Book value
+ Market vs .
Principal
price buyers& Firm's accounting value
sellers would
trade assets
.
2 Income statement
Cash Flow
Balance sheet
/ Liability
Assets
1. : +
Equity
when balance
analyzing sheet , 3 concerns :
Accounting liquidity
& Debt
value
vs
vs
equity
cost
be
-
Liquidity : How
easy assets can converted
to cash .
current assets (CA) : cast & assets can be
-
turned into cast win a
year from date of
balance sheet
t
Accounts receivable (AR) : amt not yet collected
- Inventory
+ Fixed assets least :
liquid assets
·
Tangible fixed assets :
property ,
plant equipment,
·
Intangible trademark , patent.
+
liabilities = debt >
- debt services :
put firm
in
default contract if they're not paid .
+
Equity
↑
residual
when
: Not fixed .
retained
,
earnings are added.
interest
7 +
value Book value
+ Market vs .
Principal
price buyers& Firm's accounting value
sellers would
trade assets
.
2 Income statement
