Component 3 - Financial Documents

What is a financial statement?

• Financial statements show the money out of a business

• Financial statements are formal records of the financial activities and position of a business, person, or other entity.

• Financial statements are the records of a business

• Financial statements show all the money in the business

What is turnover/revenue?

• How much a business is earning on the sidelines

• the amount derived from the provision of goods and services AFTER deduction of trade discounts, value added tax (VAT).

• money going out of a business

• the amount derived from the provision of goods and services BEFORE deduction of trade discounts, value added tax (VAT).

What is the cost of sales?

• This covers all the expenses of the business

• direct costs of producing the goods sold by a company

• the cost of how much it is to pay for products

• indirect costs of producing the goods sold by a company

What is gross profit?

• Money that you get to be overall profitable

• the amount of a business’s net income that is kept within its accounts

• Total Revenue – Total Business Expenses

• profit a company makes after deducting the costs associated with making and selling its product

What is gross profit?

• Money that you get to be overall profitable

• the amount of a business’s net income that is kept within its accounts

• Total Revenue – Total Business Expenses

• profit a company makes after deducting the costs associated with making and selling its product

What is retained profit?

• Money that you get to be overall profitable

• the amount of a business’s net income that is kept within its accounts

• Total Revenue – Total Business Expenses

• profit a company makes after deducting the costs associated with making and selling its product

What are business expenses?

• money spent, or costs incurred, by a business in their effort to generate revenues

• money spent or costs incurred on the products

• Money earned from selling products or services

• Money that works negatively and is not investable

What is a fixed asset?

• a long-term tangible piece of property or equipment that a firm owns and uses in its operations to generate income.

• short-term financial obligations that are due within one year

• represent all the assets of a company that are expected to be conveniently sold, consumed

• obligations of a company that are due more than one year in the future

What is a current asset?

• a long-term tangible piece of property or equipment that a firm owns and uses in its operations to generate income.

• short-term financial obligations that are due within one year

• represent all the assets of a company that are expected to be conveniently sold, consumed

• obligations of a company that are due more than one year in the future

What is a current liability?

• a long-term tangible piece of property or equipment that a firm owns and uses in its operations to generate income.

• short-term financial obligations that are due within one year

• represent all the assets of a company that are expected to be conveniently sold, consumed

• obligations of a company that are due more than one year in the future