Summary: Accounting & Finance A Basic Introduction | 9789059316287 | Ewoud Jansen

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• 1 business, financial statements & financial planning

• 1.2 financial statements

• Reporting tools businesses use to communicate the financial facts of their operations

  Balance sheet, income statement and cash flow

• 1.2.1 the balance sheet

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• What is a balance sheet?

  Document that shows the financial situation of a business at particular moments.

• 1.2.3 the clash flow statement

• The cash flow statement

  Shows all payments and receipts of a certain period

• 1.3 recording business transactions

• Final statement to compose

  Cash flow statement. (it basically is a summary of all transactions that involve a cash movement, either in or not.

• 1.4 profit & equity

• Two reasons equity increases

  Direct investment by the owners and keeping profit in the business

• Two ways equity can be determined

  1. Assets - debts
  2. Original equity +/- profit + capital equity injections - capital withdrawals

• Where are capital injections/withdrawals

  Are not shown on the income statement

• 1.5 financial management & planning

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• Function financial management

  Should decide in what activities the business should invest and it must decide how these activities must be financed

• Financial management includes the following tasks

  Financial planning (financial consequences of certain plans must be shown), investment selection, financing decisions (how will investments be financed), monitoring and control, planning again

• 1.6.2 formulating alternatives

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• Alternative ways to achieve the goals that have been formulated

  Are strategic options open to the business