Financial Statements Business or individual Financial health of

Financial Statements ■ Business or individual ■ Financial health of the entity named in the statement ■ Personal financial statements provide information about your current financial position and present a summary of your income and spending ■ The balance sheet shows an overall snapshot of your wealth at a specific period in time ■ The income statement shows the revenues,

Financial Statements Balance Sheet ■ It is a summary of your assets (what you own), your liabilities (what you owe), and your net worth (assets minus liabilities). ■ Assets = Liabilities + Owner’s Equity ■ Assets can be current and longterm ■ Liabilities can be current and longterm ■ Owner’s Equity is Assets - Liabilities which represents the net worth or net value of a company/individual

Personal Balance Sheet a snapshot of what one owns and owes Assets = Liabilities + Net Worth Assets Liabilities & Net Worth Cash & Equivalents Mortgages Checking Accounts $5, 000 Saving Accounts $10, 000 Total Cash/Short Term $15, 000 Personal Residence $150, 000 Total Long Term $150, 000 Other Liabilities Investments Credit Card Balance $500 Brokerage Account $20, 000 Student Loans $8, 000 Total Investments/Long Term $20, 000 Personal Loans $2, 000 Auto Loans $3, 000 Real Estate - Personal Residence $200, 000 Other Assets Cars Other Total Other Assets Total Short Term Total Liabilities $13, 500 $163, 500 $10, 000 $1, 000 Net Worth $82, 500 $11, 000 $246, 000 Total Liabilities & Net Worth $246, 000

Personal Income Statement a record of monies earned and spent for a specific period of time Gross Income Salary 2 nd Job Total Gross Income Witholding & Deductions Federal Withholding State Withholding FICA (6. 2%( Medicare (. 145%) Health Insurance Retirement (10%) Total Witholding & Deductions Disposable Income Necessary Expenses Rent Utilities Mobile Phone Internet Automobile Insurance Student Loans Groceries Total Necessary Expenses Discretionary Income Discretionary Expenses Entertainment Clothing Miscellaneous Savings Total Discretionary Expenses Surplus (Shortage) $5, 000 $800 $5, 800 $696 $580 $360 $84 $350 $580 $2, 650 $3, 150 $1, 200 $150 $65 $500 $300 $2, 480 $670 $300 $125 $200 $825 ($155)

Business Balance Sheet Assets Liabilities Current Assets Cash Securities Inventory Accounts Receivable Total Current Assets Fixed Assets Investments Current Liabilities $23, 700 $10, 000 $4, 800 $30, 500 $69, 000 Accounts Payable Wages Payable Interest Payable Taxes Payable Total Current Liabilities $40, 900 $11, 100 $2, 900 $6, 100 $61, 000 $26, 000 Long-Term Liabilities Notes Payable $20, 000 Land $5, 500 Bonds Payable $310, 000 Land Improvements $9, 500 Total Long-Term Liabilities $330, 000 Buildings $285, 000 Equipment $401, 000 Depreciation $(56, 000) Total Fixed Assets $671, 000 Total Assets $740, 000 Total Liabilities $391, 000 Shareholder's Equity Common Stock $119, 000 Accumulated Retained Earnings $230, 000 Total Shareholder's Equity $349, 000 Total Liabilities & Shareholder's Equity $740, 000

Total Revenue Cost of Goods Sold Gross Profit Operating Expenses Sales & Advertising Expenses Administrative Expenses Rent Expense Equipment Expense $100, 000 $75, 000 $25, 000 $7, 000 $5, 000 $3, 500 $2, 500 Total Operating Expenses $18, 000 Operating Income (EBIT) $7, 000 Non-Operating Expenses Interest Expense Total Non-Operating Expenses $500 Earnings Before Taxes (EBT) $6, 500 Income Taxes $1, 690 Net Income (Loss) $4, 810 Business Income Statement (Profit & Loss) a record of incomes and expenses for a specific period of time

Financial Statement Videos ■ Building personal financial statements https: //www. youtube. com/watch? v=1 s. Qeg. W-iu. Hw ■ Income Statements https: //www. youtube. com/watch? v=hr. SUq 4 wcd 0 g ■ Balance Sheets https: //www. youtube. com/watch? v=YZy. BSU 6 Ydm. M