Lesson 1 - What is Financial Fluency

Lesson 2 - Income Statement

• Fundamentally, an Income Statement shows your revenues and expenses. Often referred to as a P&L
• Comps = competitive benchmarking

• Top line = Revenue - COGS = Gross Profit (aka Profit Margin)

• GEON = Gross Profit > EBITDA > Operating Profit > Net Income
• Depreciation: “Expensing of a fixed asset as it is used reflecting it deterioration.”
• Amortization: Cost of a long-term fixed asset
• Everything above EBITDA is what managers are responsible for

Lesson 3 - Balance Sheet

• What you own and owe
• Book value = shareholder’s equity, the organization’s worth
• Accounting equation: Assets = liabilities + Owner’s equity
• Shareholder’s equity: the amount of money that would have to be returned to the company shareholders if all assets were liquidated and all debt paid off
• US “receivable” = book revenue when it is earned, not paid. Accounts receivable are invoices you put out. That’s how much cash should come in because you’re awaiting payment. What you’re owed
• PP&E less liquid than inventory, and so non-current asset
• Accounts payable, what I owe. The interplay between accounts receivable vs. payable
• Receivable ex: billed a company for catering, yet to receive
• Payable ex: Bough on credit, haven’t paid off yet
• non current liability = long term

Lesson 4 - Cash Flow Statement