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Financial Statements:  An Introduction

Financial Statements: An Introduction

Author: Don Smithmier

1. Understand the purpose and use of the basic financial statements:

(a) Income Statement, or Profit & Loss

(b) Cash Flow Statement

(c) Balance Sheet

2. Understand the basic elements of an Income Statement and Cash Flow Statement

3. Understand how to create a Cash Flow Statement

This lesson provides a fundamental overview of three basic financial statements: Income Statement, Cash Flow Statement, and Balance Sheet.

It will help you understand what each is for, as well as demonstrate how to read a P&L (Income Statement) and use it to create a Cash Flow Statement.

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Part One: Overview of Statements and Uses

A quick introduction to the purpose and use of the three basic financial statements.

Part Two: The Income Statement ("P&L")

A brief introduction to the Income Statement.

Part Three: The Cash Flow Statement (Using the Indirect Method)

Here we analyze the Statement of Cash Flows using the Indirect method. We will cover the Direct method in a future learning packet.