FIN340- Income Statement, Balance Sheet, and Depreciation

Introduction into Finance 340

Income Statement:

Sales Revenue

-Cost of Good Sold

Gross Profit Margin

-Operating expense

Operating Profit/earnings before income taxes

-Interest expense

Earnings before Tax


Net Income = R/E or dividends



Retained Earnings:


Beginning R/E

+net income


Ending R/E


*accumulates, therefore not all available in cash because ending r/e is already supporting other assets


Balance Sheet: Assets = Liabilities & Equity


Assets: What the firm owns

Liabilities: How the assets are financed


Current Assets (short term, < 1 year)
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