Tag Archives: Finance

Corporate Balance Sheet & Income Statement (Automatically Formulated Worksheet with Metrics)

28 Feb

Hey guys!

A while back I posted a sample of a corporate balance sheet to use for informal work (e.g. in a classroom).  Unfortunately, that version was in Document form, rather than in Excel, so you had to do all the calculations yourself. 

This semester, I taught Introduction to Business, wherein students had to complete sample Balance Sheets and Income Statements as part of the ‘intro to accounting’ and ‘finance’ sections in the course. To help with their projects and give them a leg up in the future, I gave them an Excel version of a balance sheet.  

Balance.pngI’ve now expanded this file to include:

  • Balance Sheet
  • Income Statement
  • Some General Metrics (e.g. Working Capital, Gross Profit Margin, Inventory Turnover).

Links:

Features of the file include:

Continue reading →

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#Business and #Finance ~ FIFO, LIFO, and AVCO

13 Mar

As always, this lesson is not intended to be professional advice. This is simply lesson material for ESL students in an introductory Economics and Finance class. Posted here for their use or for helping other students. 

Although they might sound more like little dog names (“Here, Fifo!) the terms FIFO, LIFO, and AVCO are actually extremely important terms in Accounting, Supply Chain Management, and Business!

Image result for Fifo

The company wants to know, “What is our Profit this year?” “How much Money did we make?”

Hopefully, you already remember this ~

Profit = Revenue – Cost 

This sounds pretty easy!  But actually it isn’t -_- . . . . in fact each company may count their profits in a different way!

Let’s look at how this happens Continue reading →

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#Business and #Economics: Business Vocabulary with Chinese Translations (Update)

11 Oct

I’ve added new terms to the list of Business Vocabulary.

Don’t forget, the Chinese translations come from the Chinese students rather than professional translators. While I believe they are accurate, you may want to consult professionals before using them for official documents. This is mainly intended to contribute to daily conversation between English speaking Companies and Chinese companies.

Abbreviations:

v. = Verb
n. = Noun
adj. = Adjective
adv. = Adverb

(c) All Rights Reserved. You are welcome to use this material. However, if you do end up using these definitions in your material (educational, informational, or professional), please include either a link to this webpage or the following reference: Blessing, Olivia. “Business Vocabulary with Chinese Translations.” DeceptivelyBlonde.com. This is for two reasons: 1) I’d like to share the resource with others. 2) I created these definitions myself. Thanks!

Divider

Bar Chart (n.) A way of showing information on a chart 图表. The chart shows the information divided up into rectangles. Each rectangle represents one factor and shows the “amount” of that factor.  Allows readers to compare and contrast different things.    条形图 – Tiáo xíng tú

Image result for bar chart

Capital (n.) ~ Wealth (usually money, but also includes other assets) used to buy the inputs and materials used in order to create products. The term has different meanings depending on whether you are an accountant, economist, or financial adviser. 资本 – zī běn

Graph (n.) ~ A way of showing the relationship between two factors in a picture or image form.  Two lines, one called “X” and one called “Y,” are each used to represent one factor.  Lines can then be drawn to show the relationship between X and Y as they change.   曲线图 – qū xiàn tú

Image result for line graph

Input (n.) ~ Resources used to create a product . . . technology, labor, raw materials, etc. Only materials used to make the product, not those used to sell, ship, etc.  用于创建产品的资源

Labor (n.) ~ 1. Effort. The work you put into something (“Thomas wants a higher salary for his labor“). 劳动 – Láodòng 劳动是人类生产力为改变商品的使用价值和增加商品的价值的实际使用 2. (In Economics & Finance) The number of employees (“When Capital is $15, the Labor is 4 employees“). Usually abbreviated 简短的 “L” in mathematical formulas and economic models. 劳动力 – Láodònglì

Labor (v.) ~ To work. To put effort into something.  劳动 – Láodòng

Loan (n.) ~ Money that A borrows from B and must eventually pay back. Often includes an extra “interest”息 fee.  贷 – Dài

Marginal (adj.) ~ In Business & Economics – A factor of or something that results from small or little changes. Often the profit, cost, or revenue associated with having or making “one more” of something. 边际 – biān jì

Marginal Cost (n.) ~ The cost that comes when you make one more product. 边际成本 – biān jì chéng běn

Marginal Profit (n.) ~ The profit (revenue – cost) that comes when you make one more product. 边际利润 – Biān jì lì rùn

Marginal Revenue (n.) ~ The revenue that comes when you make one more product. 边际报酬 – biān jì bào chóu

Negative Correlation (n.) The situation when two things (X & Y) are related to one another so that if X increases, Y decreases. If X decreases, Y increases. (X & Y go in opposite directions). In economics, we often say two things are “inversely related” if there is a negative correlation. For example, if Price goes up then Quantity Demanded will go down. There is a negative correlation and they are inversely related.  负相关 –– Fù xiāngguān

Output (n.) ~ The number of products created. 产量 – Chǎnliàng

Pie Chart (n.) ~ A way of showing information on a chart 图表. The chart is a circle divided into pieces, each representing a percent (%) of the whole “pie.“ 饼形图 – Bǐng xíng tú

Image result for pie chart

Positive Correlation (n.) ~ The situation when two things (X & Y) are related to one another so that if X increases, Y also increases. If X decreases, Y also decreases. 正相关 – Zhèng xiāngguān

Quantity (n.) ~ The specific amount of something. Answers the question: “How Much.” 空头 – Kōng tóu.

Rate (n.) ~ 1. The speed at which something happens. For example the “Turnover Rate” 周转率 can tell us how often employees leave a company and new ones have to be hired. 率 – lǜ  2. The percentage of X compared to Y. For example, the “Tax Rate” is how much of the Revenue (Y) is used for Taxes (X). 比率 – bǐ lǜ

Scatter Plot (n.) A way of showing information on a chart or graph. A “Scatter Plot” is a graph where the information does not make a straight line 直线. Instead it is “scattered” (疏散) around the graph. 散点图 – Sàn diǎn tú

Image result for scatter plot

Short Sell (v.) ~ X borrows stock from a stock broker, sells the stock, buys it back, and then returns the stock to the stock broker. 卖空 – Mài kōng

Stockbroker (n.) ~ Someone who buys and sells stocks (a middleman – 中间人).  证券经纪人 – Zhèngquàn jīngjì rén

Stock Market (n.) ~ A place (either a physical market or an online market) where buyers and sellers trade in company shares.  股市 – Gǔ shì

Stock Price (n.) ~ The cost of purchasing one share (股) of a company. 股价 – Gǔjià

Substitution (v.) ~ Using one thing instead of another. Replacing X with Y. 取代 – Qǔdài

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Managerial #Economics ~ Understanding #MRTS the Fun Way!

12 Jun

As always, this lesson is not intended to be professional advice. This is simply lesson material for ESL students in a Managerial Economics and Finance class. Posted here for their use or for helping other students.

PART 1 – Key Words

  1. Quantity (量) ~ How many products = Q (# of  🚗)
  2. Labor (员工) ~ The Number of Workers = L (👱)
  3. Capital (资金) ~ The Money ($$) we need = K (💲)
  4. Change (变化) ~ How much did the # change? = Δ(🔺)
  5. Marginal (边际成本) ~ Result if you add ONE MORE (+1) Q
  6. Rate (比率) ~ Ratio
  7. Substitution (取代) ~ XK = 1L (Substitution asks “what is X?”)
  8. Input (输入) ~ All the resources you put into a product. 
    1. Ice Cream 🍦has many inputs:
      1. Milk🥛
      2. Eggs🍳
      3. Sugar
      4. Ice
      5. Salt
      6. Chocolate Sauce
  9. Output (产量) ~ The product you create 
    1. Ice Cream 🍨🍦is the output!

Part 2 – The Relationship Between L, K, and Q

Every product (产量) can have lots of inputs (输入), just like the Ice Cream 🍦 or a Car 🚗.  

Input + Input + Input + Input = Output (🚗)

But in our class, we focus on TWO inputs: Labor (👱) and Money (💲)

👱+💲=🚗
Labor (👱) + Money (💲) = Quantity (🚗)
L (👱)+ K (💲)= Q(🚗)

Example: 
Justin sells 200 cars 🚗every day. Not 201 cars. Not 199 cars. He sells EXACTLY 200 cars 🚗every day. 

L (👱) + K (💲) = 200 cars (🚗)

Justin knows that in ONE DAY🔆:

  • 1 worker 👱 can create 50% of a car 🚗~ 2 workers 👱👱can create 100% of a car 🚗(one car)
    • 1L = 0.5Q 🚗
    • 2L = 1Q 🚗
  • $5 💲 can pay for 20% of a car 🚗~ $25 💲can pay for 100% of a car 🚗(one car)
    • 1K = 0.2Q 🚗
    • 5K = 1Q 🚗

Rule #1 ~ If L ⬆ and K ⬆, then the # of 🚗 cars will also ⬆

Rule #2 ~ If L ⬇ and K ⬇, then the # of 🚗 cars will also ⬇

Rule #3 ~ If L ⬇  and the # of 🚗 cars is still 200 (stay the same), K must ⬆

Rule #4 ~ If K ⬇  and the # of 🚗 cars is still 200 (stay the same), L must ⬆

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Today, Justin looks 🤔at his Money 💲and is NOT happy😭. He thinks he spends TOO MUCH money😡!  He wants to buy a new bicycle🚲, so he decides to SAVE $100 💲

This means today:

👱L + (💲K – 💲100K) = ? Q🚗

WHAT IS THE NEW Q (number of cars🚗) that Justin Makes Today?

Day 1 (Yesterday): 👱L + 💲K = 🚗200Q

Day 2 (Today): 👱L + (💲K – 💲100K) = 🚗200Q – all the 🚗cars $100K would pay for. 

Remember!  💲1K = 🚗0.20Q (one dollar pays for 0.20 cars in a day)

If Justin does not spend $100 today, he will lose the money for 20 cars! 

1K = 0.20 cars
💲-100K = -20 cars🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗

ANSWER: Justin makes 180 cars today!

L + (K – 100K) = 200 cars – 20 cars 
= 180 cars🚗

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

OK?!?🤔

NO!!!  😡Remember –> “Justin sells 200 cars 🚗every day. Not 201 cars. Not 199 cars. He sells EXACTLY 200 cars every day. ”  

PROBLEM:  How can Justin still make and sell 200 cars tomorrow if he still saves the $100 (-100K) as today.

Rule #4 ~ If 💲K ⬇  and the # of 🚗 cars is 200 (the same), 👱L must ⬆

 

QUESTION: HOW MUCH should 👱L  go up (⬆)?  

  • Step 1 ~ How many extra cars 🚗does Justin need to make? ~ Justin can make 180 cars right now if he saves $100 (-100K) but L stays the same as yesterday.  

200 🚗 – 180 🚗= 20🚗
Justin needs to make 👱L ⬆ enough to make 20 extra cars🚗 tomorrow.

  • Step 2 ~ How much L does Justin have to add (+) to make 20 more cars tomorrow?

?L + (K – 100K) = 200Q

Remember,

👱1L = 0.5Q 🚗 | 👱👱2L = 1Q 🚗
20Q 🚗= 40L

ANSWER: Justin will have to hire 40 workers (+40L) in order to make 20 more cars tomorrow.

👫👫👫👫👫👫👫👫👫👫👫👫👫👫👫👫👫👫👫👫

FINAL SOLUTION

*Substitution = Adding L to Decrease K

(👱L + 👱40L) + (💲K – 💲100K) = 200 Q (🚗)

Part 3 ~ MRTS

MRTS = Marginal Rate of Technical Substitution

 CodeCogsEqn.gif

Go Back to Part 2.

  • 🔺K💲
    • Yesterday, Justin had K💲
    • Tomorrow, Justin has -100K💲
    • 🔺K = -100K💲
  • 🔺L👱
    • Yesterday, Justin had L👱
    • Tomorrow, Justin has +40L👱
    • 🔺L = +40L👱

CodeCogsEqn.gif

CodeCogsEqn (2).gif

CodeCogsEqn (3).gif

MRTS = 5K : 2L |5💲 : 2👫

This just tells us:

  1. For every 2 👫workers Justin has, he spends $5💲💲💲💲💲.
  2. For every 1 👱worker Just has, he spends $2.50💲💲½
  3. If Justin wants to hire 1 worker (+1L) , he will save $2.50 (-2.50K)
  4. I Justin wants to save $40 (-40K), he must hire 16 workers (+16L)

MRTS shows how much L👱 can be a substitute for K💲!

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#Business Vocabulary ~ #Economies of Scope and Scale

27 May

As always, this lesson is not intended to be professional advice. This is simply lesson material for ESL students in Business, Economics, and Finance classes. Posted here for their use or for helping other students.

Unlike Short-Term (短期) Planning, Long-Term (长期) operates on different goals (目标), strategies (战略), and analyses (分析).  

Business.jpg

Two common goals are very important: Economies of Scale and Economies of Scope. Continue reading →

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Important #Business Symbols ~ Asian #Currencies

15 May

As always, this lesson is not intended to be professional advice. This is simply lesson material for ESL students in Business, Economics, and Finance classes. Posted here for their use or for helping other students.

Here are some helpful Business Symbols (标志) you should be familiar with for Business English! Although there are some more common than these, you should memorize these symbols because they are the currencies for Asia.

Currencies

৳ Bangladesh (孟加拉国) Taka (BDT)
Nu Bhutan (不丹) Ngultrum (BTN)
៛ Cambodia (柬埔寨) Riel (KHR)
¥ China (中国) Yuan or Renminbi (CNY)
¥ Japan (日本) Yen (JPY)
₹ India (印度) Rupee (INR)
Rp Indonesia (印度尼西亚) Rupiah (IDR)
₭ Laos (老挝) Kip (LAK)
RM Malaysia (马来西亚) Ringgit (RM)
Rf Maldives (马尔代夫) Rufiyaa (MVR)
₮ Mongolia (蒙古) Tögrög (MNT)
K Myanmar (缅甸) Kyat (BMK)
रू Nepal (尼泊尔) Rupee (NPR)
₱ Philippines (菲律宾) Peso (PHP)
₽ Russia (俄国) Ruble (RUB)
₩ South Korea (韩国) Won (KRW)
 රු Sri Lanka (斯里兰卡) Rupee (LKR)
NT$ Taiwan (台湾) New Dollar (TWD)
฿ Thailand (泰国) Baht (THB)
₫ Vietnam (越南) Dong (VND)

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Understanding Compound Interest

14 Jun

As always, this lesson is not intended to be professional advice. This is simply lesson material for ESL students in a Managerial Economics and Corporate Finance class. Posted here for their use or for helping other students.

Corporate Value (值)

Financial officers and Managers are extremely responsible for the monetary (货币) goings-on in their companies. As we said before, the Wealth Maximization Rule means that Financial and Corporate Managers are required to maximize (最大化) the profits (收益) for their investors (投资者). 

However, maximizing profits requires in-depth (深入)planning and micro-managing (微观) your funds today while considering (考虑) future profits as well.

There are two types of Value (值) that you should be aware of in Finance and Economics.

The first is called Present Value (现值) and is the value today of something that will increase in value in the future. Example: When we loan someone $1,000 at 10% interest, we know that our $1,000 loan will increase in value in the future. Present Value = PV.

The second is called Future Value (未来价值) and is the value that the item will have in the future. Future Value = FV.

Interest (利)

I’ll make another post later discussing the many ways to use Present and Future value in your company, but today I just wanted to talk about using them to calculate (计算) “Compound Interest” (复利).  

Usually, when we loan money to someone or invest (投资) our money in something, we do so on the condition that we receive back more money than we put in.  Our corporation is not a charity (慈善机构), we don’t loan you things for free!  The original money we invest is called the Principal (本息).  The extra money we get on top is called the Interest (利).  

Example ~ Company A (a large global corporation) invests $100,000 in a small new business called Company B.  Company B has 10 years to pay it back. But Company A doesn’t do this for free ~ they want to maximize their profits too. That means they have to make some money on this contract (合同).  So they ask Company B to pay an additional 7% per year.   

$100,000 = Principal
7% = Interest

COMPOUND INTEREST (复利)

Problem! ~ 7% of what?  
Answer! ~ It depends:)   It depends on how Company A decides to count it.

There are two separate mathematical formulas (数学公式) you can use to figure out the Interest.  

The first one is called Simple Interest (单利) and I’ve already looked at it before.

The second method is called Compound Interest (复利). Compound Interest says that each payment period, Company B is going to pay an additional 7% of the currently owed principal! Lenders and Investors really like compound interest a lot better than simple interest.  

For example: I borrow $1000 due in two years.  My interest rate is 10%.  

If I use Simple Interest:  Year 1, I owe $1000 + 10% interest = $1100.  Year 2, I owe $1100 + (10% of $1000) = $1200. 🙂 

If I use Compound Interest: Year 1, I owe $1000 + 10% interest = $1100.  Year 2, I owe $1100 + (10% of $1100) = $1210

The formula for Compound Interest is:

I = Interest
P = Present Value
R = Interest Rate
T = Number of Years Involved
N = Number of Times a Year

Example 

Company A (a large global corporation) invests $100,000 in a small new business called Company B.  Company B has 10 years to pay it back. The interest rate is 7% compounded  bi-annually.   What is the Total Interest (利) you will pay over 10 Years?

Calculating FUTURE VALUE and PRESENT VALUE using COMPOUND INTEREST

The total interest is of course important to both Company A and Company B, there are two other important numbers that the financial managers of Company A want to know–the Present Value of their money and the Future Value of their money.  

Future Value

FV = Future Value (how much money you will make in total)
PV = Present Value
R = Interest Rate
T = Number of years involved
N = Times per Year

Using our example above with Company A & B, the Future Value is calculated like this:

That means Company A will make a total of $286,968.46 if they invest their $100,000 in Company B now. Over 10 years, their $100,000 will change into $386,968.46.:) We like this plan!

Present Value

Sometimes, for example with bonds (债券), we know the Future Value (how much money will be paid to us in the end). But we don’t know how much money has to be invested (Present Value) to get that future result.  So Present Value is calculated by the formula: 

PV = Present Value 
FV = Future Value
R = Interest Rate
T = Number of years involved
N = Number of Times per Year

Example: Mary Jane knows that in 4 years, she needs to have a total of $150,000 to pay her college tuition. She has an interest-generating account that gives her a 4% compound interest rate bi-annually on everything she puts in. How much money should she invest today (Present Value) in order to have $150,000 in 4 years?

That means that Mary Jane needs to put $101,336.67 in her bank account now in order to get $150,000 in the future. 

JPEG

KEY TERMS TO REMEMBER

  1. Value (值)
  2. Present Value (现值)
  3. Future Value (未来价值)
  4. Interest (利)
  5. Simple Interest (单利)
  6. Compound Interest (复利)
  7. Principal (本息)
  8. Monthly (每月一次)
  9. Weekly (每周)
  10. Annually (每年)
  11. Bi-Annually (一年两次)
  12. Quarterly (季刊)

FORMULAS TO REMEMBER

Compound Interest

Future Value

Present Value

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Understanding Simple Interest

6 Jun

As always, this lesson is not intended to be professional advice. This is simply lesson material for ESL students in a Managerial Economics and Corporate Finance class. Posted here for their use or for helping other students.

Corporate Value (值)

Financial officers and Managers are extremely responsible for the monetary (货币) goings-on in their companies. As we said before, the Wealth Maximization Rule means that Financial and Corporate Managers are required to maximize (最大化) the profits (收益) for their investors (投资者). 

However, maximizing profits requires in-depth (深入)planning and micro-managing (微观) your funds today while considering (考虑) future profits as well.

There are two types of Value (值) that you should be aware of in Finance and Economics.

The first is called Present Value (现值) and is the value today of something that will increase in value in the future. Example: When we loan someone $1,000 at 10% interest, we know that our $1,000 loan will increase in value in the future.  Present Value = PV.

The second is called Future Value (未来价值) and is the value that the item will have in the future. Future Value = FV.

Interest (利)

I’ll make another post later discussing the many ways to use Present and Future value in your company, but today I just wanted to talk about using them to calculate (计算) “Simple Interest” (单利).  

Usually, when we loan money to someone or invest (投资) our money in something, we do so on the condition that we receive back more money than we put in.  Our corporation is not a charity (慈善机构), we don’t loan you things for free!  The original money we invest is called the Principal (本息).  The extra money we get on top is called the Interest (利).  

Example ~ Company A (a large global corporation) invests $100,000 in a small new business called Company B.  Company B has 10 years to pay it back. But Company A doesn’t do this for free ~ they want to maximize their profits too. That means they have to make some money on this contract (合同).  So they ask Company B to pay an additional 7% per year.   

$100,000 = Principal
7% = Interest

SIMPLE INTEREST (单利)

Problem! ~ 7% of what?  
Answer! ~ It depends 🙂   It depends on how Company A decides to count it.

There are two separate mathematical formulas (数学公式) you can use to figure out the Interest.  The first one is called Simple Interest (单利). Simple Interest says that each payment period Company B is going to pay an additional 7% of the original principal ($100,000).  The formula for Simple Interest is:

I = Interest
P = Present Value
R = Interest Rate
T = Number of Years Involved

Example

Company A (a large global corporation) invests $100,000 in a small new business called Company B.  Company B has 10 years to pay it back. The interest rate is 7% per year.   What is the Total Interest (利) you will pay over 10 Years?

Calculating FUTURE VALUE and PRESENT VALUE using SIMPLE INTEREST

The total interest is of course important to both Company A and Company B, there are two other important numbers that the financial managers of Company A want to know–the Present Value of their money and the Future Value of their money.  

Future Value

FV = Future Value (how much money you will make in total)
PV = Present Value
R = Interest Rate
T = Number of years involved

Using our example above with Company A & B, the Future Value is calculated like this:

That means Company A will make a total of $70,000 if they invest their $100,000 in Company B now. Over 10 years, their $100,000 will change into $170,000. 🙂 We like this plan!

Present Value

Sometimes, for example with bonds (债券), we know the Future Value (how much money will be paid to us in the end). But we don’t know how much money has to be invested (Present Value) to get that future result.  So Present Value is calculated by the formula: 

PV = Present Value 
PV = Future Value
R = Interest Rate
T = Number of years involved

Example: Mary Jane knows that in 4 years, she needs to have a total of $150,000 to pay her college tuition. She has an interest-generating account that gives her a 4% interest rate on everything she puts in. How much money should she invest today (Present Value) in order to have $150,000 in 4 years?

That means that Mary Jane needs to put $129,310.35 in her bank account now in order to get $150,000 in the future. 

JPEG

KEY TERMS TO REMEMBER

  1. Value (值)
  2. Present Value (现值)
  3. Future Value (未来价值)
  4. Interest (利)
  5. Simple Interest (单利)
  6. Principal (本息)

FORMULAS TO REMEMBER

Simple Interest

Future Value

Present Value

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Corporate Finance – What is the Balance Sheet?

27 Apr

**As always, my work is designed with Chinese ESL student in mind. Please consider this when reading.

Corporate Finance has 3 main types of Financial Documents:

  • Balance Sheet ~ Value of the Company (How it is divided between Debt and Equity)
  • Income Statement ~ Specific Use of Assets and Liabilities
  • Cash Flow Statement ~ How Cash is Handled from the moment it enters the company until it leaves.

Balance Sheet

We all know that Revenue has to be bigger than Costs/Expenses if the company is going to be successful (Revenue – Cost = Profit). And if you are a financial manager, your legal responsibility is to increase profits for the Shareholders (earn a profit). 

However, for years all that companies worked with were Income Statements. Unfortunately many of them quickly realized they could hide money away in methods not put on the Income Statement. Not only that, but the Income Statement didn’t really outline all of the important factors used in looking at Profit.  So now we have the Balance Sheet -a financial document intended to make everything more honest and clear.

The Balance Sheet summarizes the Assets, Liabilities, and Equity at a certain date.

  •    It is an overall summary of what the company looks like. 
  •   It explains to the Business how well the company is functioning
  •   It explains to Owners how well their Equity is doing
  •   In general, it tells us if the company will be profitable or not.

For example, how much is the company worth July 2016?

General Equation (Assets = Equity – Liabilities)

  • Assets = Everything owned by the company.  Obtained by either creating capital or obtaining debts (borrowing money)
    • Current Assets –Assets that will be turned into cash within 1 Year
    • Long-Term (Fixed) Assets – Assets that will be turned into cash within more than 1 Year
    • Intangible Assets – Assets that you cannot see, but that still exist
  • Liabilities = All the debt the company has to pay
    • Current Liabilities—Debts to be paid this year.
    • Long-Term Liabilities—Debts to be paid in more than 1 year.
  • Equity (Net Worth) = Assets – Liabilities (The Company’s Value for the owners)
    • Owner’s Equity (Owner’s Investment – Owner’s Withdrawals from the Company +/- Net Income/Loss)
    • Retained Earnings
    • Net Profits or Losses

 

The Balance Sheet will be organized according to the “Liquidity” of the category (meaning how quickly that category of assets, liabilities, or equity can be changed into cash). The farther down the list we go, the less liquid the categories become.

EXAMPLE

Assets

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Couldn’t be more Proud

28 Nov
20141128_234639[1]

My Finance Students in their Graduation Photo. ❤

I’ve just spent the last week working for hours and hours with some of my students to get their papers finished. One of my students told me it was the first time a teacher had ever told him good job, and another said he had never worked so hard on an assignment. In the end, I’ve never been so impressed or proud as I have been of these people. They work their butts off trying to not only comprehend difficult subjects, but also to explain it back to you in a completely foreign language. And after looking at the finished works tonight, I could almost cry I’m so happy. They got it! and they wrote it! and they even added in some really great ideas for the solutions part, things that I wouldn’t even have thought of. So tonight I want the world to know that my students rock and I love them all!

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