Breaking Into Wallstreet - 400 Questions
questions with complete solutions (graded
A+)
Save
Walk me through the 3 financial statements. - answer "The 3 major
financial statements are the Income Statement, Balance Sheet and Cash
Flow Statement.
The Income Statement gives the company's revenue and expenses, and
goes down to Net Income, the final line on the statement.
The Balance Sheet shows the company's Assets - its resources - such as
Cash, Inventory and PP&E, as well as its Liabilities - such as Debt and
Accounts Payable - and Shareholders' Equity. Assets must equal
Liabilities plus Shareholders' Equity.
The Cash Flow Statement begins with Net Income, adjusts for non-cash
expenses and working capital changes, and then lists cash flow from
investing and financing activities; at the end, you see the company's net
change in cash."
Can you give examples of major line items on each of the financial
statements? - answer Income Statement: Revenue; Cost of Goods Sold;
, SG&A (Selling, General & Administrative Expenses); Operating Income;
Pretax Income; Net Income.
Balance Sheet: Cash; Accounts Receivable; Inventory; Plants, Property &
Equipment (PP&E); Accounts Payable; Accrued Expenses; Debt;
Shareholders' Equity
Cash Flow Statement: Net Income; Depreciation & Amortization; Stock-
Based Compensation; Changes in Operating Assets & Liabilities; Cash
Flow From Operations; Capital Expenditures; Cash Flow From Investing;
Sale/Purchase of Securities; Dividends Issued; Cash Flow From
Financing
How do the 3 statements link together? - answer "To tie the statements
together, Net Income from the Income Statement flows into
Shareholders' Equity on the Balance Sheet, and into the top line of the
Cash Flow Statement.
Changes to Balance Sheet items appear as working capital changes on
the Cash Flow Statement, and investing and financing activities affect
Balance Sheet items such as PP&E, Debt and Shareholders' Equity. The
Cash and Shareholders' Equity items on the Balance Sheet act as
"plugs," with Cash flowing in from the final line on the Cash Flow
Statement."
questions with complete solutions (graded
A+)
Save
Walk me through the 3 financial statements. - answer "The 3 major
financial statements are the Income Statement, Balance Sheet and Cash
Flow Statement.
The Income Statement gives the company's revenue and expenses, and
goes down to Net Income, the final line on the statement.
The Balance Sheet shows the company's Assets - its resources - such as
Cash, Inventory and PP&E, as well as its Liabilities - such as Debt and
Accounts Payable - and Shareholders' Equity. Assets must equal
Liabilities plus Shareholders' Equity.
The Cash Flow Statement begins with Net Income, adjusts for non-cash
expenses and working capital changes, and then lists cash flow from
investing and financing activities; at the end, you see the company's net
change in cash."
Can you give examples of major line items on each of the financial
statements? - answer Income Statement: Revenue; Cost of Goods Sold;
, SG&A (Selling, General & Administrative Expenses); Operating Income;
Pretax Income; Net Income.
Balance Sheet: Cash; Accounts Receivable; Inventory; Plants, Property &
Equipment (PP&E); Accounts Payable; Accrued Expenses; Debt;
Shareholders' Equity
Cash Flow Statement: Net Income; Depreciation & Amortization; Stock-
Based Compensation; Changes in Operating Assets & Liabilities; Cash
Flow From Operations; Capital Expenditures; Cash Flow From Investing;
Sale/Purchase of Securities; Dividends Issued; Cash Flow From
Financing
How do the 3 statements link together? - answer "To tie the statements
together, Net Income from the Income Statement flows into
Shareholders' Equity on the Balance Sheet, and into the top line of the
Cash Flow Statement.
Changes to Balance Sheet items appear as working capital changes on
the Cash Flow Statement, and investing and financing activities affect
Balance Sheet items such as PP&E, Debt and Shareholders' Equity. The
Cash and Shareholders' Equity items on the Balance Sheet act as
"plugs," with Cash flowing in from the final line on the Cash Flow
Statement."
