Chapter 13 - Business organization and financial data. This chapter includes contents: Describe the three major forms of business organization, provide a brief description of the income statement, provide a brief description of the balance sheet,. | Chapter 13 Business Organization and Financial Data © 2011 John Wiley and Sons Chapter Outcomes Describe the three major forms of business organization Provide a brief description of the income statement Provide a brief description of the balance sheet Provide a brief description of the statement of cash flows Chapter Outcomes (Continued) Identify the goal and functions of financial management Describe the agency relationships in a business organization and their implications for financial management The Mission or Vision Statement Indicates firm’s target market(s) Identifies goods/services the firm will produce, distribute, or sell Will guide major decisions Supported by business and financial plans to implement strategy Periodically reviewed and revised Forms of Business Organization in the . Proprietorships Partnerships Limited partnership Corporation Subchapter S corporation Limited liability company Financial implications of organizational form (Table ) Annual Report Information source for corporate shareholders Contains Discussions of operating and financial information of past year Future opportunities Financial statements Accounting Principles Public firm’s statements must conform to Generally Accepted Accounting Principles Footnotes “Accrual” accounting versus cash flows Table Comparison of Accounting and Financial Perspectives Accounting Focus Finance Focus Matching Revenue Identifying cash inflows and Expenses (accrual concept) and outflows Use of different accounting Track the cash flows to can lead to manipulation of financial assess the “quality” of statements and earnings Seek to Measure Firm Profitability Measure cash usage Emphasis is historical Looks forward Attempts to track assets and Market value of assets depreciate them Income Statement ($ millions) Net revenues or sales $63,335 Cost of goods sold 44,747 Gross profit 18,588 Operating expenses: Selling, general and admin. 14,366 . | Chapter 13 Business Organization and Financial Data © 2011 John Wiley and Sons Chapter Outcomes Describe the three major forms of business organization Provide a brief description of the income statement Provide a brief description of the balance sheet Provide a brief description of the statement of cash flows Chapter Outcomes (Continued) Identify the goal and functions of financial management Describe the agency relationships in a business organization and their implications for financial management The Mission or Vision Statement Indicates firm’s target market(s) Identifies goods/services the firm will produce, distribute, or sell Will guide major decisions Supported by business and financial plans to implement strategy Periodically reviewed and revised Forms of Business Organization in the . Proprietorships Partnerships Limited partnership Corporation Subchapter S corporation Limited liability company Financial implications of organizational form (Table )
