About This Chapter
Analyzing Customer Financial Statements - Chapter Summary
With this chapter on analyzing customer financial statements, you can brush up on the purpose, components, and format of the various parts of financial statements, such as income statements, balance sheets, notes, statements of cash flow, and statements of changes in equity. Our professional instructors have simplified critical information regarding financial statements, so that by the end of this chapter you will be able to:
- Explain income statement calculations and give examples
- Analyze cash flow statement patterns
- Share the definition, purpose, and elements of financial statement analysis
- Describe comparative statements as balance sheet disclosures
- List a variety of measures of financial health, including liquidity, asset usage, and EPS
- Discuss various inventory valuation methods, such as LIFO, FIFO, and weighted average
- Assess methods of depreciation
- Detail annual investment reports and notices of corporate actions
Many of the lessons in this chapter allow you to take advantage of brief, descriptive videos that break down the information in an easily-accessible way. As you go through each lesson, you'll find that important terms are emphasized so you can focus your attention on key concepts and vocabulary. Once you've mastered all of the self-check lesson quizzes, the chapter test allows you to assess your knowledge overall.
1. What Is an Income Statement? - Purpose, Components & Format
There are four financial reports that are created during the accounting cycle. These four reports make up what is commonly known as the financial statements. In this lesson, we will focus our attention on the income statement. We will learn what the income statement is, what its role in the financial statements is, and why it is important in accounting.
2. Income Statement Calculations: Definition & Examples
Most securities jobs require one to understand financial statements and be able to evaluate the performance of individual companies on the various securities exchanges. This lesson will discuss the income statement and profitability.
3. The Balance Sheet: Purpose, Components & Format
There are four financial reports that make up a group known as the financial statements. We will take a walk with one of those reports - the balance sheet - and learn what it is, what items are included on it and what its role in the group is.
4. Statement of Changes in Equity: Purpose & Examples
Companies must prepare a number of financial statements to comply with accounting regulations. In this lesson, you'll learn about one of these statements, the statement of changes in equity.
5. The Statement of Cash Flows: Purpose, Format & Examples
There are four financial reports that are required in financial statements. In this lesson, you will learn about the fourth and final report - the statement of cash flows. You'll learn what the makeup of the statement is, its purpose, and why it is important to users of the financial statements.
6. Analyzing Cash Flow Statement Patterns
The cash flow statement identifies where a company obtained and used cash during a specified period of time. In this lesson, we analyze the patterns conveyed by this statement.
7. Financial Statement Analysis: Definition, Purpose, Elements & Examples
In this lesson, we'll define financial statement analysis and discuss the main categories. You'll also learn how to calculate a financial ratio in each category and analyze the results.
8. The Purpose of Notes on Financial Statements
Financial statements are very important in accounting and finance. In this lesson, you will learn about notes to the financial statements, what information they may give, and why they are important to financial statement users.
9. Comparative Statements as Balance Sheet Disclosures
In this lesson, you'll learn if a comparative balance sheet is required and in what order the balance sheets must appear. You will also be introduced to horizontal and vertical balance sheet analysis.
10. Measuring Financial Health: Liquidity, Profitability & Bankruptcy Risk
Ratio analysis is the most common technique used to evaluate a company's financial health. In this lesson we will use ratios to evaluate a company's liquidity, debt management and risk of bankruptcy, and profitability.
11. Measuring Financial Health: Asset Usage, Competitiveness & EPS
To evaluate a firm, analysis of a corporation's asset use, efficiency, industry competitiveness, and valuation measures are key. These measures represent the intersection of corporate finance and investment management.
12. Inventory Valuation Methods: Specific Identification, FIFO, LIFO & Weighted Average
This lesson introduces you to the cost flow assumption methods of specific identification: FIFO, LIFO, and weighted average. You will also learn how to compute inventory in a perpetual system using the methods of FIFO, LIFO, and weighted average.
13. Methods of Depreciation
After watching this video lesson, you will understand the differences between the different depreciation methods that are available to you. We will discuss three different methods depending on how you use the equipment that you want to calculate the depreciation for.
14. Delivering Annual Investment Reports & Notices of Corporate Actions
This lesson covers common corporate action events and discusses the various filings required by the SEC. A scenario is also included to provide better context for why these public notices are so important for companies and investors.
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Other chapters within the Series 7 Exam: Study Guide & Practice course
- Advertising & Public Communication in the Securities Industry
- The New Issues Market
- New Issue Regulations in the Securities Industry
- Brokerage Account Types & Restrictions
- Retirement Plans & Tax-Advantaged Accounts
- Handling Customer Investment Information & Discretionary Accounts
- Obtaining Supervisory Approvals for Investment Accounts
- Analyzing Customer Investment Profiles
- Understanding Equity Securities
- Tax Treatment of Equity Securities Transactions
- Packaged Investment Products
- Variable Life Insurance & Annuities
- Real Estate Investment Trusts
- Direct Participation Programs
- Understanding Options in Investing
- Debt Securities
- Investing in Corporate Bonds
- Municipal Securities
- Municipal Securities Analysis & Regulations
- Registered Hedge Funds
- Asset-Backed Securities
- U.S. Government Agency Securities
- Investment Product Disclosures
- Customer Updates & Record Retention
- Customer Transactions & Confirmations
- Transactional Delivery Obligations & Settlement Procedures
- Investment Disputes & Customer Complaints
- Addressing Margin Issues