Scribd
Upload
196 views27 pages

Financial Accounting & Decision Making Notes

The document discusses key concepts in financial accounting and decision making. It defines owners' equity as money invested by the owner called capital. It lists stakeholders as owners, employees, community, government and shareholders. It explains that the income statement records income and expenses, while the balance sheet records assets and liabilities. Key components of financial statements are also defined, including capital/owner's equity, assets, liabilities and income. Cash flow statements track cash inflows and outflows. Du Pont analysis breaks down return on assets and return on equity into their components.

Uploaded by

suhanibhatt90
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
196 views27 pages

Financial Accounting & Decision Making Notes

The document discusses key concepts in financial accounting and decision making. It defines owners' equity as money invested by the owner called capital. It lists stakeholders as owners, employees, community, government and shareholders. It explains that the income statement records income and expenses, while the balance sheet records assets and liabilities. Key components of financial statements are also defined, including capital/owner's equity, assets, liabilities and income. Cash flow statements track cash inflows and outflows. Du Pont analysis breaks down return on assets and return on equity into their components.

Uploaded by

suhanibhatt90
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 27

Financial Accounting

&
Decision Making
O

earn
notes
Owner's is called Capta
money Custome
starch is .

Employees
Growth
,

Business is
for Profit &
Shareholds also
category of
are a stakeholder
-
Big .
community
Yes its business
Is
Capital by
to which
Liability given
->

cry
↑ owner a

is a
diff entity !
Government is also stakeholder taxes
they
a want
any
.

If income> expense you


make
profit other
way
is lose

Income Statement -> Income & Spenses recorded

Assets & liabilities ->


Balance sheet

CAG - for auditor looks at


everything I lits know all
-
owner

is
good
Owners can
be
Investor . Stakeholders :
Shareholder
.

Components of Financial Statements -


ALICE

Capital/owner Equity
Assets -
BS , - a
BS
Liabilities
-

Income - IS

BS-Balance She dement > Goes to respective


our
Cash Flow Statement

Cash outflow and inflow for an “accounting peroid”

How money is managed - how its generated & used.


In flow = “+” = coming in
Outflow = “-“ = going out

Cash equivalents = short term deposits with bank


Debentures is basically a “Debt” for a specific “Tenure” = Debenture
Du Pont Analysis

ROA = EBIT /Total Assets EBIT = Profit margin

ROA = [EBIT/Sales] * [Sales/Assets] Sales/Assets = asset utilisation

ROE = PAT / Net Worth <- is a function of margin, volume & leverage.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy