DANCEST 805 Lecture Notes - Lecture 3: Retained Earnings, Gross Profit, Quick Ratio
Document Summary
Finance chapter 2: financial statement analysis: ifrs: firms" disclosure of financial information. Auditor: neutral third party that checks annual financial statements of firms to ensure that they are reliable, prepared according to accounting standards & provide evidence to support reliability of info. Balance sheet: lists firm" assets & liabilities; provides snapshot of financial position at given point in time. Assets: list firm"s cash, inventory, property, plant, equipment and other investments firm has made. Shareholders" equity: difference between firm"s assets & liabilities; accounting measure of firms" net worth. Balance sheet equation: assets = liabilities + shareholders" equity. Current assets: cash or assets that could be converted into cash within one year. Non-current/fixed assets: assets that produce tangible benefits for more than one year. Depreciation expense: amount that reduces asset that was purchased before due to wearing out. Accumulated depreciation: total amount deducted over life of asset; not an actual cash expense.
