《会计英语》课程教学课件（PPT讲稿）Unit 11 Financial Statements

FinancialStatementsUnit 11I.BalanceSheetII.IncomeStatementII.CashFlow Statement

Unit 11 Financial Statements Ⅰ.Balance Sheet Ⅱ.Income Statement Ⅲ.Cash Flow Statement

FinancialStatementsFor a businessenterprise,all the relevant financialinformation,presented in a structuredmanner andin aform easy to understand,are called the financialstatements.They typically include four basic financialstatements日Balance sheet:referred to as statement of financialpositionorcondition,reportson a company'sassetsliabilities,and ownershipeguity ata specifictime.口Incomestatement:referredtoasProfitandLossstatement(or a"P&L")reportson acompany'sincomeexpenses,andprofitsoveraperiodoftime.口Statement of retained earnings:explains the changesin a company's retained earnings overthe reportingperiod口CashflowsStatement:reportsonacompany'scashflow activities,particularly its operating,investingandfinancingactivities2

2 Financial Statements  For a business enterprise, all the relevant financial information, presented in a structured manner and in a form easy to understand, are called the financial statements. They typically include four basic financial statements  Balance sheet: referred to as statement of financial position or condition, reports on a company's assets, liabilities, and ownership equity at a specific time.  Income statement: referred to as Profit and Loss statement (or a "P&L"), reports on a company's income, expenses, and profits over a period of time.  Statement of retained earnings: explains the changes in a company's retained earnings over the reporting period.  Cash flows Statement : reports on a company's cash flow activities, particularly its operating, investing and financing activities

Forlargecorporations,these statementsareoftencomplex andmayinclude anextensiveset of notes to the financial statements andmanagement discussion and analysis.Notestofinancial statements are consideredan integralpart of thefinancial statements.All the financial statementsarebuilttobeused口togetherto present a complete pictureof acompany'sfinance3

3  For large corporations, these statements are often complex and may include an extensive set of notes to the financial statements and management discussion and analysis. Notes to financial statements are considered an integral part of the financial statements.  All the financial statements are built to be used together to present a complete picture of a company’s finance

Purposeoffinancial statements"The objective of financial statementsis to口provide information about the financial position,performanceand changesin financial positionof an enterprise thatis useful to a wide rangeof usersinmaking economicdecisions.Reported assets,liabilities and eguity are三directly relatedto an organization's financialposition.Reportedincomeand expenses aredirectly relatedto an organization'sfinancialperformance.口Financialstatementsshouldbeunderstandable,relevant,reliable andcomparable./

4 Purpose of financial statements  "The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions. "  Reported assets, liabilities and equity are directly related to an organization's financial position. Reported income and expenses are directly related to an organization's financial performance.  Financial statements should be understandable, relevant, reliable and comparable

Financial statements are intended to be understandable byreaders who have"a reasonableknowledge of business andeconomic activities and accounting and who are willing tostudythe information diligently."Financial statements maybeusedbyusersfordifferent purposes.> Owners and managers require financial statements to makeimportant business decisions that affect its continuedoperations.Financial analysis is performed on these statementsto provide management with a more detailed understanding ofthe figures. They are also used as part of management's annualreporttothe stockholders5

5  Financial statements are intended to be understandable by readers who have "a reasonable knowledge of business and economic activities and accounting and who are willing to study the information diligently. " Financial statements may be used by users for different purposes. ➢ Owners and managers require financial statements to make important business decisions that affect its continued operations. Financial analysis is performed on these statements to provide management with a more detailed understanding of the figures. They are also used as part of management's annual report to the stockholders

Employees need these reports in making collectivebargaining agreements (CBA) with the management, in thecase of labor unions or for individuals in discussing theircompensation,promotion and rankingsProspectiveinvestors make use offinancial statements toassess the viability of investing in a business. Financialanalyses are often used by investors and are prepared byprofessionals (financial analysts),thus providing them withthe basis formaking investment decisionsFinancialinstitutions (banks and other lending companiesuse them to decide whether to grant a company with freshworking capital or extend debt securities (such as a longterm bankloanordebentures)tofinance expansion andother significant expenditures.6

6 ➢ Employees need these reports in making collective bargaining agreements (CBA) with the management, in the case of labor unions or for individuals in discussing their compensation, promotion and rankings. ➢ Prospective investors make use of financial statements to assess the viability of investing in a business. Financial analyses are often used by investors and are prepared by professionals (financial analysts), thus providing them with the basis for making investment decisions. ➢ Financial institutions (banks and other lending companies) use them to decide whether to grant a company with fresh working capital or extend debt securities (such as a long￾term bank loan or debentures) to finance expansion and other significant expenditures

Government entities (taxauthorities)needfinanciastatements to ascertainthe propriety and accuracy oftaxes and other duties declared and paid by a companyVendors who extend credit to a business requirefinancial statementsto assess the creditworthiness ofthebusinessMedia and the general public are also interested infinancial statementsfor a variety of reasons

7 ➢ Government entities (tax authorities) need financial statements to ascertain the propriety and accuracy of taxes and other duties declared and paid by a company. ➢ Vendors who extend credit to a business require financial statements to assess the creditworthiness of the business. ➢ Media and the general public are also interested in financial statements for a variety of reasons

Case%光明乳业Diversified productsBright Dairysuch as powergeneration,MilkRAjetengines,medicalCtechnologiesandservicesFruitJuice&Sugar8

8 Case Fruit Juice & Sugar Diversified products, such as power generation, jet engines, medical technologies and services Milk

I.Balance SheetBalance sheetDecember31.2009AssetsCash$21,0004,500Accountsreceivable$40,000Equipment5,500Less:AccumulatedDepreciation34,500$60,000TotalassetsLiabilities$4,000AccountsPayable2,000SalariesPayable1,700InterestPayable19,500NotesPayable1,500UnearnedRevenue$28.700Total liabilityOwners'EguityCapital$29,7001,600Retained Earnings31,300Total owner's equity$60.000Total liabilities and owner's equity9

9 Ⅰ.Balance Sheet Balance sheet December 31, 2009 Assets Cash $ 21,000 Accounts receivable 4,500 Equipment $40,000 Less: Accumulated Depreciation 5,500 34,500 Total assets $ 60,000 Liabilities Accounts Payable $ 4,000 Salaries Payable 2,000 Interest Payable 1,700 Notes Payable 19,500 Unearned Revenue 1,500 Total liability $ 28,700 Owners’ Equity Capital $29,700 Retained Earnings 1,600 Total owner’s equity 31,300 Total liabilities and owner’s equity $ 60,000

Thebalance sheetisthefundamentalandbackboneof the wholeaccountingancreportingsystem.Itprovidesa snapshotof thebusiness's financial position,suchas assets,liabilities and owner's equity ataspecifictime.Assets = Liabilities + Owner's equity10

10 Assets = Liabilities + Owner’s equity The balance sheet is the fundamental and backbone of the whole accounting and reporting system. It provides a snapshot of the business’s financial position, such as assets, liabilities and owner’s equity at a specific time