Ch 3: Financial Statement Basics

About This Chapter

Learn about the fiscal health of any business by learning to understand financial statements. These comprehensive video lessons come with quizzes to help you retain the information presented.

Financial Statement Basics -- Chapter Summary and Learning Objectives

A business's financial statement is a picture of their financial situation and activities for a given time period. This chapter will examine the parts of these documents and explain how to use them to determine the health of the business represented by the statement. The topics covered herein are:

  • Control of cash flows
  • Typical financial statements
  • Preparation of financial statements
  • Ratio analysis

Video Objective
Control of Cash: Definition & Methods Explain cash flows and the statement of cash flows.
What Are Financial Statements? - Definition, Purpose & Importance Discuss different types of financial statements including balance sheets, income statements, and cash flows.
Preparing Financial Statements Examine the preparation of financial statements.
Financial Statement Ratios: Determining Company Performance Study different methods of ratio analysis used to determine company performance.
Liquidity Ratio: Definition, Calculation & Analysis Discover the ability of a business to cover short term obligations out of available cash.

5 Lessons in Chapter 3: Financial Statement Basics
Test your knowledge with a 30-question chapter practice test
Control of Cash: Definition & Methods

1. Control of Cash: Definition & Methods

Cash is a valuable commodity and one that is vulnerable to fraudulent activity. In this lesson, you will learn what makes up a company's cash account as well as how to control cash.

What Are Financial Statements? - Definition, Purpose & Importance

2. What Are Financial Statements? - Definition, Purpose & Importance

Financial statements are big players in the world of accounting. In this lesson, you will be introduced to each of the financial statements. You will also learn what their role is in the accounting industry, who they are important to and why they are important.

Preparing Financial Statements

3. Preparing Financial Statements

Financial statements are the most sought after reports in the financial industry. In this lesson, you will learn how to prepare them using information found on the adjusted trial balance.

Financial Statement Ratios: Determining Company Performance

4. Financial Statement Ratios: Determining Company Performance

Have you ever wondered why the financial statements are so important to a company? In this lesson, you will learn about several financial statement ratios and how they help determine company performance.

Liquidity Ratio: Definition, Calculation & Analysis

5. Liquidity Ratio: Definition, Calculation & Analysis

The financial stability of a company can be tested in many ways. One of the quickest ways to see just how well a company is performing is to use financial ratios. In this lesson, you will learn what liquidity ratios are, how to calculate them, and how to interpret them.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

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