Financial Accounting Foundations

Introduction

• Why financial accounting?

1. Accounting Basics

• Accounting vs. bookkeeping
• The accounting equation

2. The Financial Statement

• The financial statement
• The balance sheet
• The income statement
• The statement of cash flows

3. The Mechanics of Accounting

• How financial statements are made
• Debits and credits
• Journal entries
• Making the financial statements

4. Current Issues in Financial Accounting

• Current financial accounting issues
• Revenue recognition
• Long-term assets including impairment
• Working with leases
• Earnings per share
• Investment securities and derivatives
• Deferring taxes
• Inventory and COGS

5. Financial Statement Analysis

• Using financial statements
• Common size statements
• DuPont framework
• Debt ratio
• Operating ratio
• Price-earnings (P/E) ratio

Conclusion

• How you can use financial statements