Master Class in Basics of balance sheet and Profit & Loss

Define the meaning and types of financial statements, including the income statement and balance sheet, and show how revenue, cogs, gross profit, and net income guide decision making.

Understand the balance sheet, fund flow statement, and cash flow statement, assets, liabilities, equity, funds sources and uses, and operating, investing, and financing activities.

Explore how schedules accompany income statements and balance sheets, providing detailed breakdowns and notes that help stakeholders understand the company’s financial position and performance.

Identify stakeholders in financial statements, including shareholders, creditors, banks, suppliers, employees, regulators, management, and analysts. Use statements to assess profitability, liquidity, and overall financial health for decisions.

Identify government and regulatory agencies, tax authorities, investors, creditors, management, employees, unions, analysts, and acquirers as financial statement stakeholders, and show how they use reports to assess profitability and liquidity.

Understand the objectives of financial statements and how they support economic decisions by assessing liquidity, profitability, and financial position through assets, liabilities, and equity.

Learn to interpret financial statements by evaluating performance, profitability, and changes in financial position, including revenue growth, ROI, and cash flow, via income statement, balance sheet, and cash flow statement.

Explore the basics of income statements and balance sheets, including revenue, cost of goods sold, gross profit, operating expenses, and net income.

Understand the horizontal T-form income statement for the year ending, showing revenues and gains on one side and expenses and losses on the other to analyze net income.

Explore the balance sheet as a snapshot of a company’s financial position on a date, detailing current and non-current assets, current and non-current liabilities, shareholders’ equity, and the accounting equation.

Analyze the asset side of the corporate balance sheet, distinguishing fixed assets as long-term tangible and categorizing tangible movable, tangible immovable, and intangible assets such as patents, trademarks, and goodwill.

Learn how fixed assets are shown as gross block minus depreciation to net blocks, and how short- and long-term investments—marketable securities and cost-based valuation under schedule six—drive liquidity and growth.

Define current assets and quick assets, cash, debtors, inventory, marketable securities, and prepaid expenses. Differentiate loans and advances as short-term and long-term financing; advances are prepayments to employees or suppliers.

Identify miscellaneous expenditures and losses as fictitious assets, preliminary expenses, and unusual or non-regular costs, shown separately from operating expenses to reveal liquidity and financial health.

Explore the liabilities side of the balance sheet, including proprietors funds, current liabilities, and long-term liabilities, and understand their impact on solvency and liquidity.

Explore owners' equity and share capital on the liabilities side, including components like common and preferred stock, retained earnings, reserves, and accumulated other comprehensive income.

Understand reserves and surplus as components of shareholders’ equity, including general and specific reserves, capital and revenue reserves, and retained earnings for future investments and dividends.

Examine long term liabilities and current liabilities and provisions on balance sheet, including bonds payable, long term loans, bank overdrafts, and provisions, with quick liabilities and quick ratio for liquidity.

Identify contingent liabilities as potential future obligations arising from past events, disclosed in notes and not recognized on the balance sheet unless probable, with examples like disputed taxes and guarantees.

Explore the proforma balance sheet in horizontal form, detailing assets on the left and liabilities and shareholders’ equity on the right, with current and non-current assets and liabilities.