1. Explain information that can be obtained from financial statements

2. Explain the purposes of financial statements

3. Explain the purposes of financial statements

4. Financial Statements

5. The income Statement
Specifies the financial results of a business over a defined period of time
States whether a business is making a profit or not
Also known as a profit and loss statement or P and L Statement
Revenue – Expenses = Profit or Loss

6. The Income Statement
Revenue ( Sales ) – The money generated by the company by selling its products or services to customers.
Expenses
Cost of Good Sold – Companies that sell items ( Service companies do not have this expense) Represents all expenses directly related to making and storing a company’s goods including raw materials, warehousing and direct labor cost
Operating Expenses – include all cost incurred in operating the business that are not directly related to the production and storage of a company’s good include administrative salaries, research and development, and marketing cost

7. Operating Expenses

8. Operating Expense

9. Operating Expense
If Volume pizza stops paying for raw materials to produce pizza or stops paying rent on the pizzeria if can’t produce it’s product. This reflects cost of Goods Sold.
If Volume pizza stops paying office rent they will get evicted from their administrative office, however they will still be able to produce their product. This reflects operating expenses.

10. Accrual Accounting System

11. Accrual Accounting System cont.
Reports cash revenue and unpaid invoices
Reports expenses, however could reflect unpaid expenses that have not been paid

12. Earning Before Interest and Taxes

14. The Income Statement
Interest Expense
Income Tax

15. Performance Activity.
Research the Companies you invested in on the Market Watch Game. Team members need go on a scavenger hunt for financial information about the companies. Team member are to gather Revenue, Cost of Goods Sold, Gross Profit, Operating Expense, Depreciation, and EBIT for the most recent years. Please include the links where the information was obtained.