BASIC OVERVIEW OF FINANCIAL

INCOME STATEMENT
BALANCE SHEET
CASH FLOW STATEMENT
INANCIAL STATEMENTS
 INCOME STATEMENT CASH FLOW STATEMENT
(FLOW / PERIOD) (PERIOD / INDIRECT)
Order of Forecasting 1 3
REVENUES / TURNOVER SALES PAT
MLO COGS DA
GP CHANGE IN CA
SGAM OPEX CHANGE IN CL
EBITDA CASH FLOW FROM OPERATIONS (1)
DA
EBIT CHANGE IN FIXED ASSETS, GROSS
I CASH FLOW FROM INVESTING (2)
EBT
TAX CHANGE IN DEBT
NET INCOME PAT CHANGE IN EQUITY CAPITAL
CASH FLOW FROM FINANCING (3)

NET CHANGE IN CASH (1) + (2) + (3)

CASH BEGIN
CASH END
 BALANCE SHEET
(POINT/AS ON DATE/ CUMULATIVE)
2
CASH
CURRENT ASSETS INVENTORY, ACC RECE
FIXED ASSETS, GROSS PPE, GROSS
ACCUMULATED DEP
FIXED ASSETS, NET
TOTAL ASSETS

CURRENT LIA ACC PAYABLE

DEBT
EQUITY CAPITAL
RETAINED PROFIT RESERVES & SURPLUS
TOTAL LIA AND SHAREHOLDER EQUITY

ASSETS = LIABILITY + EQUITY

 Date Business Activity Income Statement
1-Apr-19 Rs.2,00,000 capital introduced in business
3-Apr-19 Purchase office equipment for Rs. 10,000. Rev 1 500
Equipments have an estimated life of 2 yrs Rev 2 7,500
8-Apr-19 Pay to landlord Rs. 3,000 as deposit and
Rs. 2,000 as advance rent for the first month. COGS (3,750)
13-Apr-19 Receive Rs.6,000 as one year magazine
subscription to the monthly newsletter. Staff Cost (2,500)
18-Apr-19 Purchase and receive 1000 books at a cost Int Exp (60)
of Rs.50 per book for a total of Rs.50,000. Rent (2,000)
Paid 50% amount in cash and the remaining Dep (417)
50% amount is payable in 30 days. Adv (2,500)
18-Apr-19 Spent Rs.2,500 in advertisement
19-Apr-19 Took a loan of Rs.20,000 from bank for Net Proft (3,227)
working capital, Interest rate is 10%
and loan is to be repaid after 2 years.
20-Apr-19 Sell for cash 50 books at Rs.100 each book. Dividend 0
21-Apr-19 Sell 25 books at Rs.100 each book, Retained Earning (3,227)
Payment is due in 30 days
27-Apr-19 Hire a part time clerk to whom company
will pay Rs.100/hr. Clerk works for 25 hrs
before 30th Apr 2019. 50% amount paid
in cash and the remaining 50% paid in May.
30-Apr-19 Mail out the first month's newsletter to
customer. This subscription had been
sold on 13-Apr-19.
 Balance Sheet
Liability Mo-0 Mo-1 Assets Mo-0 Mo-1
Capital 200,000 Off Equi 9,583
Retained Earning (3,227) Deposit 3,000

Loan 20,000

Unearned Rev 5,500 Trade Rec 2,500

Trade Payable 25,000 Adv Rent -
unpaid Salary 1,250 Cash 187,190
Inv 46,250

248,523 248,523

Checksum -
 Cash Flow Statement

PBT (3,227)
Dep 417
Int 60 Inc Stat
TR (2,500)
Inv (46,250)
unpaid salary 1,250
TP 25,000
UnEarned Rev 5,500
Int Paid (60) Actual Amount paid for int
Cash Flow from Operation (19,810)

Off Equ (10,000)

Depo (3,000)

Cash Flow from Inv (13,000)

Equity 200,000
loan 20,000
Cash Flow from Finance Avti 220,000

Flow of the Year (I+II+III) 187,190

Op Cash and Cash Equi -

Cl Cash & Cash Equi 187,190
on 8 April you have paid Rs. 2000 as advance rent for a month
Current Asset it is
on 13 April 6000 for a year unearned revenue
Current Liability

on 18 April Unit PU Total

1000 50 50000 I have got some inv, which is not yet sold Cash outflow
it will be my inv in Current Assets

Paid 50% 25000 25000

unpaid 50% 25000 Trade Payables Current Liability cash inflow
on 20 April Unit PU Total
50 100 5000 Revenue
on 21 April Unit PU Total
25 100 2500 Revenue but not yet rec

on 27 April Rate Hr worked Amt Payable

100 25 2500 Exp in IS

Paid 50% 1250

Unpaid 50% 1250 O/T Exp in BS

on 30 April Rev from 6000 that was unearned, one month rev has been earned now

6000 for year

500 for a month earned.
5500 unearned

Settling the month

Dep Amt =Cost of the asset - Scrape value

Life of an asset

Dep Amt 5000 in a year

Dep Amt 417 in a month

Int Paid =Loan Amt * Int %

2000 for a year
166.66666667 for a month
5.4794520548 for a day
60.273972603 11 Days
Cash outflow

cash inflow
Unit Sold Cost PU Total
We have made a sale, inv went out dec of inv in my BS 75 50 3750
cost of those inv sold, has been realised now inc your COGS in IS
 Business Activity Income Statement Balanc
ABC is a high end restaurant which started operations Particulars Amount Liability
on 1st Jan 2019. Following transactions
occurred during 2019 Sales 6,500,000 Equity Capital
Capital introduced Rs.1,000,000, on 1/1/19 Sale-Mem 1,500,000 Retained Profit
Fixed Assets bought Rs.500,000, depreciation 20% SLM Acc Payable
5 Waiters and an accountant were hired on 01/01/19 COGS 2,000,000 Unearned Revenue
at Rs.250,000 per month, for the full year Salary Exp 3,000,000 Loan
Office rental of 250,000 for full year, paid on 1/1/19 Depreciation 100,000
Food & Beverages sold for cash Rs.6,500,000 Rent Exp 250,000
Food and Beverage items taken on credit worth Interest Expense 42,000
Rs.2,000,000 during the year. Of this Rs.300,000 was
unpaid at the end of year
5 year memebership scheme for Rs.250,000 each was Profit 2,608,000 Total Liabilities
offered. They sold 30 memberships in cash in 2019
On 1/1/19 Rs.700,000 was borrowed at rate of 8%
Out of this Rs.350,000 was repaid on 20/6/19.
Interest in full was pid on 31/12/19.
On 31/12/19 half of the Net Income was distributed
as dividends to shareholders

Build the Income Statement, Balance Sheet

and Cash Flow Statement as of 31/12/2019
 Balance Sheet Cash Flow Statement
Mo-0 Mo-1 Assets Mo-0 Mo-1

1,000,000 Cash 8,554,000 PAT 2,608,000

1,304,000 Fixed Asset 400,000 Depreciation 100,000
300,000 Acc Payable 300,000
ned Revenue 6,000,000 Unearned Revenue 6,000,000
350,000 Cash Flow From Operations 9,008,000

Purchase of Fixed Assets (500,000)

Cash Flow From Investing (500,000)

Equity Raised 1,000,000

8,954,000 Total Assets 8,954,000 Loan 350,000
Check - Dividend Paid (1,304,000)
Cash Flow From Financing 46,000

Net Change in Cash 8,554,000

Cash BOP -
Cash EOP 8,554,000