Financial Accounting 3 min read
The Essential Role of Transaction Analysis
Question: Information provided by a set of financial statements is essential to any individual analyzing a business or other organization. The availability…
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What Is a Balance Sheet?
A balance sheet is a financial statement that reports a company’s assets, liabilities and shareholders’ equity at a specific point…
Financial Accounting 3 min read
Reporting a Balance Sheet
Question: The third financial statement is the balance sheet. If a decision maker studies a company’s balance sheet (on its Web site,…
Financial Accounting 3 min read
Increasing the Net Assets of a Company
Question: The second financial statement is known as the statement of retained earnings1.The term retained earnings has not yet been introduced. What information does…
Financial Accounting 6 min read
Reported Profitability and the Principle of Conservatism
Question: Previously, the term “asset” was defined as a future economic benefit owned or controlled by a reporting company. On an income statement, items such…
Financial Accounting 4 min read
The Construction of an Income Statement
Question: The revenues, expenses, assets, and liabilities reported by an organization provide data that are essential for decision making. The informational value of these figures…
Financial Accounting 1 min read
How do you build a 3 statement model?
There are several steps required to build a three statement model, including: Input the historical financial information into Excel Determine…
Financial Accounting 1 min read
3 statement model
What is a 3 statement model? A 3 statement model links the income statement, balance sheet, and cash flow statement…
Financial Accounting 4 min read
financial modeling
What is a financial model? A financial model is simply a tool that’s built in Excel to forecast a business’…
Financial Accounting 2 min read
Financial Reporting?
Definition: Financial reporting refers to the communication of financial information, like financial statements, to the financial statement users, like investors and…
Financial Accounting 2 min read
General Purpose Financial Statements?
General-purpose financial statements are issued throughout the year to aid investors and creditors in their decision making process. A set…
Financial Accounting 4 min read
Financial Ratio Analysis
Financial ratios are mathematical comparisons of financial statement accounts or categories. These relationships between the financial statement accounts help investors,…