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Topic: Business
Number of pages / Number of words: 50 / 13852
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26

What happens when a company changes its depreciation estimates? 26

What happened when a company changes its depreciation methods? 27

Contingent Liabilities 28

What are liabilities? 28

What are contingent liabilities? 28

When do you record a contingent liability on the balance sheet? 28

When do you record a contingent liability in the financial footnotes? 28

What are the most common examples of contingent liabilities? 29

Other liabilities on the company’s books 29

Capital leases versus operating leases 30

What is a capital lease? 30

What is an operating lease? 30

When do we record one versus the other? 30

What is the impact on the company’s financials of recording a lease? Balance sheet? Income Statement? Cash Flow Statement? 31

How can we compare companies that have a lot of operating leases to those that have a lot of capital leases? 31

Why does a company lease instead of buy? 32

Rule based versus principles based accounting treatments? 32

Stockholders’ Equity 33

What is c/s and APIC? What is par value? 33

What is Retained Earnings? What is Accumulated Deficit? 33

What is Treasury Stock? How does the purchase and resale of treasury stock get recorded? On the B/S? On the Income Statement? On the Statement of Cash flows? 33

Why do companies repurchase their shares? 34

What is “Other Comprehensive Income”? 34

What is preferred stock? 35

How does dividend get recorded? 35

What is a cumulative preferred stock? What is a convertible preferred stock? 35

What is a convertible debt security? How does it get recorded on the financials? 35

Acquiring marketable securities and companies (M&A accounting) 37

What are the cost method, equity method, and consolidation? 37

How do you treat dividends received in the equity method? 40

What is minority interest? Where does it show up on the company’s financials? 40

What is the treatment for M&A transactions? 41

What is goodwill? How is it treated in the US and outside of the US? 41

Effect of accounting transactions on the statement of cash flows 42

Ratio Analysis 45

What are ratios? What should you understand about ratios? 45

What are the major ratios? 45

What is the DuPont equation? What information does it provide? 45

What are common size income statements and common size balance sheets? 45

How do you identify industries based on the ratios? 45

Financial Statement Basics

Understanding of the 3 financial statements – (balance sheet, income statement and statement of cash flows)...


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26

What happens when a company changes its depreciation estimates? 26

What happened when a company changes its depreciation methods? 27

Contingent Liabilities 28

What are liabilities? 28

What are contingent liabilities? 28

When do you record a contingent liability on the balance sheet? 28

When do you record a contingent liability in the financial footnotes? 28

What are the most common examples of contingent liabilities? 29

Other liabilities on the company’s books 29

Capital leases versus operating leases 30

What is a capital lease? 30

What is an operating lease? 30

When do we record one versus the other? 30

What is the impact on the company’s financials of recording a lease? Balance sheet? Income Statement? Cash Flow Statement? 31

How can we compare companies that have a lot of operating leases to those that have a lot of capital leases? 31

Why does a company lease instead of buy? 32

Rule based versus principles based accounting treatments? 32

Stockholders’ Equity 33

What is c/s and APIC? What is par value? 33

What is Retained Earnings? What is Accumulated Deficit? 33

What is Treasury Stock? How does the purchase and resale of treasury stock get recorded? On the B/S? On the Income Statement? On the Statement of Cash flows? 33

Why do companies repurchase their shares? 34

What is “Other Comprehensive Income”? 34

What is preferred stock? 35

How does dividend get recorded? 35

What is a cumulative preferred stock? What is a convertible preferred stock? 35

What is a convertible debt security? How does it get recorded on the financials? 35

Acquiring marketable securities and companies (M&A accounting) 37

What are the cost method, equity method, and consolidation? 37

How do you treat dividends received in the equity method? 40

What is minority interest? Where does it show up on the company’s financials? 40

What is the treatment for M&A transactions? 41

What is goodwill? How is it treated in the US and outside of the US? 41

Effect of accounting transactions on the statement of cash flows 42

Ratio Analysis 45

What are ratios? What should you understand about ratios? 45

What are the major ratios? 45

What is the DuPont equation? What information does it provide? 45

What are common size income statements and common size balance sheets? 45

How do you identify industries based on the ratios? 45

Financial Statement Basics

Understanding of the 3 financial statements – (balance sheet, income statement and statement of cash flows)...


Essay fragment

General points of the essay

analysis of financial statement Accounting Balance Sheet Analysis Boeing Financial Statement Analysis FINANCIAL STATEMENT ANALYSIS J P Morgan Financial Statement Analysis Of Hindustan Unilever Ltd Financial Statement Analysis Heineken Financial statement analysis Mutual Fund Cash Flows And Stock Market Performance Ratio Analysis and Statement of Cash Flows Paper Ratio Analysis and Statement of Cash Flows Ratio Anayzes and statement of cash flowfor Dell and Apple Ratio And Financial Statement Analysis Of Nike Statement Of Cash Flows Statement of Cash Flows Paper The statement of financial performance is based on data relating to past transactions and events. Hence the statement of financial performance is of no use to an investor’s decision making process.

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