1. Ch. 2 The Basic Financial Statement I. Goals: Understand the format of the firm’ B/S, I/S and the statement of cash flow Construct each of these statements Link worksheets togather

2. 1. Income statement: Summarizes the results of the firm’s operation over a period of time. Contains several different measures of profits Monthly, Quarterly and Annually To get a picture of actual earnings, we should take accounts of depreciation Major items:

4. 2. Balance sheet assets, liabilities and equity of the firm at a specific point in time What it owns and owes? How to finance purchasing assets historically? Major items

6. 3. Statement of Cash Flows outlines of the sources of the firm’s cash flows and where the cash flows went Major items:

8. 4. Common Sized FS. Easy comparisons between firms which are different sizes Spotting important trends which otherwise might be obscured by the dollar amounts I/S - percentage of sales B/S - percentage of assets

9. II. Steps of Making Statements 1. Frames or Structures that are readable and look clear 2. If possible, entering Texts and then Numbers. 3. If possible, use formulas in the calculation.

10. III. Major Skills 1) Look at two worksheet at the same time Ex) Window > New Window, Then again Window> Arrange> Horizontal 2) Make a group Ex) Select references > Data>Group and Outline (if you press - sign, it will make grouped cells disappear, vice versa)

11. 3) Custom View If you want to keep a revised worksheet, it will give you a good chance to work with. Ex) View>Custom view> type new name. 4) Combine Word and Excel Simply select Excel Symbol in Word and then work on your excel file.