Merrill Lynch Financial Statements Guide
Merrill Lynch Financial Statements Guide
Balance sheet – what company owns and owes at report date; assets = liabilities/equity
Income statement – shows whether a company’s operation over a period of time (i.e. a year) was profitable or lost $$
Statement of changes in shareholders’ equity – reconciles activity in shareholders’ equity section of balance sheet from period to period; typically changes are due to company profits/losses, dividends, and/or stock issuance
Cash flow statement – cash movements over a time period (operating, investing, and financial activities)
**gaap = generally accepted accounting principles; rules and standards!
Historical costs – all things on financial statements are historical cost (i.e. how much money a company paid for something when the transaction happened, how much $ a company was paid for deals at the time they occurred…)
Balance Sheet (Assets Section)
Receivables – uncollected amounts of $$; things owed to company; considered an asset
Allowance for doubtful accounts – money subtracted from accounts receivable balance because some customers fail to pay their bills…
Current assets – include cash and other assets that can be turned into cash within a year from the balance sheet date; accounts receivable, inventories, prepaid expenses…listed on balance sheet in order of how “liquid” they are aka how fast they can be converted into cash
Cash and cash equivalents = cash on hand, money on deposit at bank, highly liquid securities
Marketable securities – short-term securities that are readily salable and usually have quoted prices…(trading securities, held-to-maturity securities, available-for-sale securities)
Inventories – consist of raw materials (used to make product), work-in-progress, and finished goods
*inventories are valued at either cost value or market value, whichever is lower
Prepaid expenses and other current assets – prepaid expenses are like insurance premiums for a full year or advertising costs for something
Balance sheet – what company owns and owes at report date; assets = liabilities/equity
Income statement – shows whether a company’s operation over a period of time (i.e. a year) was profitable or lost $$
Statement of changes in shareholders’ equity – reconciles activity in shareholders’ equity section of balance sheet from period to period; typically changes are due to company profits/losses, dividends, and/or stock issuance
Cash flow statement – cash movements over a time period (operating, investing, and financial activities)
**gaap = generally accepted accounting principles; rules and standards!
Historical costs – all things on financial statements are historical cost (i.e. how much money a company paid for something when the transaction happened, how much $ a company was paid for deals at the time they occurred…)
Balance Sheet (Assets Section)
Receivables – uncollected amounts of $$; things owed to company; considered an asset
Allowance for doubtful accounts – money subtracted from accounts receivable balance because some customers fail to pay their bills…
Current assets – include cash and other assets that can be turned into cash within a year from the balance sheet date; accounts receivable, inventories, prepaid expenses…listed on balance sheet in order of how “liquid” they are aka how fast they can be converted into cash
Cash and cash equivalents = cash on hand, money on deposit at bank, highly liquid securities
Marketable securities – short-term securities that are readily salable and usually have quoted prices…(trading securities, held-to-maturity securities, available-for-sale securities)
Inventories – consist of raw materials (used to make product), work-in-progress, and finished goods
*inventories are valued at either cost value or market value, whichever is lower
Prepaid expenses and other current assets – prepaid expenses are like insurance premiums for a full year or advertising costs for something