BUS 3302 Lecture Notes - Lecture 2: Alimony, Personal Finance, Cash Out
Document Summary
Chapter 2 using financial statements and budgets. Section 2-1 : mapping out your financial future. Income and expense statement : a financial statement that measures financial performance over time: tracks income earned and expenses made during a given period. Budgets : a detailed financial report that looks forward, based on expected income and expenses: directly affect both the balance sheet and the income and expense statement. Balance sheets contain three parts: assets : what is owned, has four categories based on an assets" underlying characteristics and uses. Liquid assets : low-risk financial assets held in the form of cash or instruments that can be converted to cash quickly, with little or no loss in value. Insolvency : the financial state in which net worth is less than zero, showing insufficient financial planning: balance sheet equation : the accounting relationship among the three categories. Total assets = total liabilities + net worth. Net worth = total assets total liabilities.
