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Understanding Financial Records Animal Science- Small Animal Unit B.

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Presentation on theme: "Understanding Financial Records Animal Science- Small Animal Unit B."— Presentation transcript:

1 Understanding Financial Records Animal Science- Small Animal Unit B

2 Competency 5.00 Develop a financial record keeping system for use in the small animal industry Objective 5.01 Describe the elements of a financial statement Objective 5.02 Use the principles of record keeping to compose a financial statement.

3 What kinds of records should businesses keep? Assets Liabilities Net worth Profit and loss statement Cash receipts Non-cash receipts Invoice

4 Assets Things that one owns and completely pays for. Example: Your car after all payments have been made.

5 Current Assets Items quickly converted to cash or that will be sold within 12 months cash checking savings stocks or bonds Money others owe you Current non-depreciable inventory

6 Non-current Assets Items that have a useful life or more than one year land Non-current, non-depreciable inventory

7 Liabilities Things that you owe money to other people for or debts Example: My Visa

8 Liabilities Current-due to be paid this year fertilizer and feed bills tractor and building payments part of the mortgage due this year Non-Current-not due this year mortgages

9 Net Worth One’s assets minus their liabilities. You have $3000 in the bank, but you owe $1750 for your bills. Your net worth is $

10 Net Worth Current Assets + Non-Current Assets=Total Assets Current Liabilities + Non-Current Liabilities=Total Liabilities

11 Debt-to-Equity Ratio Used by banks and lending institutions to decide whether or not to lend money to specific people or businesses Debt-to-Equity Ratio = Total Liability Net Worth


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