3. climes against the total assets of an
organization
Claims of no owners
Owner's Equity
Claims of owners
4. Cumulative total of net income, net loss, and
dividends since start of business
5. Inflows of assets that result from performing
services or selling goods
the service is performed or
the goods are delivered
6. Outflows of assets or incurrence of liabilities
while earning revenues
A business incurs expenses to earn revenues
7. Things of Value = Claims
Assets = Equities
Assets = Liabilities + Owner's Equity
Assets - Liabilities = Net Assets
8. Use accounting equation
Is there a change in assets?
How much was the change?
Is there another change in assets?
Is there a change in liabilities?
How much was the change?
Is there another change in liabilities?
Is there a change in owners’ equity?
How much was the change?
15. Reports cash flows during period
Operating activities
Investing activities
Financing activities
16.
17. Are total assets higher or lower?
What is percent change in total assets?
Is the percent of total liabilities to total liabilities
plus owner’s equity increasing or decreasing?
18. Are revenues higher or lower?
What is the percentage change in total revenues?
Is the percentage of total expenses to total
revenues increasing or decreasing?
19. Is the business operating efficiently by using the least
amount of asset investment to generate a given level
of total revenues?
Total revenues
divided by
Average total assets