ENTREP

• INCOME STATEMENT is a structured financial statement that presents the income, expenses, and net income or net loss realized during a certain period.
• NET INCOME represents the excess of the gross income or revenue against the expenses.
• NET LOSS refers to the excess of the expenses against the revenue or income during the period.
• ACCOUNTS RECEIVABLE it is an asset account, while sales is a revenue account
• SALES is a revenue account
• BALANCE SHEET the proper procedures in preparing another financial statement.
• LIQUIDITY refers to the ability of the business to currently pay maturing obligations from the date of the balance sheet.
• SOLVENCY or STABILITY refers to the ability of the business to pay long-term obligations while maintaining stability.
• major parts of the balance sheet: NAME OF THE BUSINESS, TITLE OF THE STATEMENT, DATE
• major sections of the balance sheet: ASSET SECTION, LIABILITY SECTION, OWNER'S EQUITY SECTION
• ASSET SECTION the assets of the business may either be fixed to the soil or moveable.
• ASSETS refers to the properties owned or controlled by the business
• LIABILITY refers to the financial obligations of the business as of the date indicated in the balance sheet.
• CURRENT LIABILITY includes financial obligations of the business that are payable or will mature within one year from the date of the financial statements, notwithstanding the normal operating cycle of the business.
• NONCURRENT LIABILITY refers to the financial obligations of the business whose maturity period is beyond one year from the date of the balance sheet.
• FINANCIAL STATEMENTS refers to income statement and the balance sheet.
• INCOME STATEMENT reflects the result of the financial operation for a given period, whole the balance sheet shows the financial position as of a given date.
• PROFITABILITY RATIOS these are group of financial statement ratios that primarily determine the profitability of the business operation.
• GROSS PROFIT RATE it represents the difference between net sales and cost sales of the entrepreneurial venture during a given period.
• COST refers to the purchase price of the product including the outlay required in producing it.
• OPERATING PROFIT MARGIN RATE it is the excess of gross profit from operating expenses.
• these are the expenses incurred during a particular period only. OPERATING PROFIT MARGIN RATE
• LIQUIDITY RATIOS refer to a group of financial statement ratios that are intended to measure the ability of the business to pay its currently maturing obligations.
• CURRENT ASSETS are assets that can be used, consumed, or converted to cash within one year or within the normal operating cycle of the business.
• CURRENT LIABILITIES are financial obligations that will mature within one year from the date of the balance sheet.
• QUICK ASSETS refer to cash, trading securities, and trade receivable.