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    Merrill Lynch Financial Analyst Booklet

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    billy93
    The document provides an overview of key financial statements including the balance sheet, income statement, statement of changes in shareholders' equity, and statement of cash flows. It explains that the balance sheet provides a snapshot of a company's financial position at a point in time by showing its assets and liabilities. The income statement shows a company's profit or loss over a period of time. The statement of changes in shareholders' equity reconciles changes in equity from period to period. The statement of cash flows reports cash movements during a period by operating, investing, and financing activities. It also notes that financial statements may differ for specialized industries like banks.

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    Merrill Lynch Financial Analyst Booklet

    Uploaded by

    billy93
    135 views2 pages
    The document provides an overview of key financial statements including the balance sheet, income statement, statement of changes in shareholders' equity, and statement of cash flows. It explains that the balance sheet provides a snapshot of a company's financial position at a point in time by showing its assets and liabilities. The income statement shows a company's profit or loss over a period of time. The statement of changes in shareholders' equity reconciles changes in equity from period to period. The statement of cash flows reports cash movements during a period by operating, investing, and financing activities. It also notes that financial statements may differ for specialized industries like banks.

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    Financial Analyst Entry Level

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    The document provides an overview of key financial statements including the balance sheet, income statement, statement of changes in shareholders' equity, and statement of cash flows. It explains that the balance sheet provides a snapshot of a company's financial position at a point in time by showing its assets and liabilities. The income statement shows a company's profit or loss over a period of time. The statement of changes in shareholders' equity reconciles changes in equity from period to period. The statement of cash flows reports cash movements during a period by operating, investing, and financing activities. It also notes that financial statements may differ for specialized industries like banks.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    135 views2 pages

    Merrill Lynch Financial Analyst Booklet

    Uploaded by

    billy93
    The document provides an overview of key financial statements including the balance sheet, income statement, statement of changes in shareholders' equity, and statement of cash flows. It explains that the balance sheet provides a snapshot of a company's financial position at a point in time by showing its assets and liabilities. The income statement shows a company's profit or loss over a period of time. The statement of changes in shareholders' equity reconciles changes in equity from period to period. The statement of cash flows reports cash movements during a period by operating, investing, and financing activities. It also notes that financial statements may differ for specialized industries like banks.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Merrill Lynch Financial Analyst Booklet

    The financial statements generally consist of the balance sheet, income statement,
    and statement of changes in shareholders equity, statement of cash flows and
    footnotes. The annual financial statements usually are accompanied by an
    independent auditors report (which is why they are called audited financial
    statements). An audit is a systematic examination of a companys financial
    statements; it is typically undertaken by a Certified Public Accountant (CPA). The
    auditors report attests to whether the financial reports are presented fairly in
    keeping with generally accepted accounting principles, known as GAAP for short.

    The Balance Sheet


    The balance sheet, also called statement of financial position, portrays the financial
    position of the company by showing what the company owns and what is owes at
    the report date. The balance sheet may be thought of as a snapshot, since it reports
    the companys financial position at a specific point in time. Usually balance sheets
    represent the current period and a previous period so that financial statement
    readers can easily identify significant changes.

    The Income Statement


    On the other hand, the income statement can be thought of more like a motion
    picture, since it reports on how a company performed during the period(s)
    presented and shows whether that companys operations have resulted in a profit or
    loss.

    The Statement of Changes in Shareholders Equity


    The statement of changes in shareholders equity reconciles the activity in the
    equity section of the balance sheet from period to period. Generally, changes in
    shareholders equity result from company profits or losses, dividends and/or stock
    issuances. (Dividends are payments to shareholders to compensate them for their
    investment.)

    The Statement of Cash Flows


    The statement of cash flows reports on the companys cash movements during the
    period(s) separating them by operating, investing and financing activities.
    **The main nongovernmental bodies that set rules and standards are the Financial
    Accounting Standards Board [FASB] the primary, authoritative private-sector
    body that sets financial accounting standards, the American Institute of Certified
    Public Accountants [AICPA] and the exchanges the securities trade on**

    Key point
    Typical financial statements are illustrative and generally representative for a
    manufacturing company. However, financial statements in certain specialized
    industries, such as banks, broker-dealers, insurance companies and public

    utilities, would look somewhat different. Thats because specialized


    accounting and reporting principles and practices apply in these and other
    specialized industries.

    Balance Sheet
    Assets
    Current Assets
    In general, current assets include cash and those assets that, in the
    normal course of business, will be turned into cash within a year from the balancesheet date. Current assets are listed on the balance sheet in order of their
    liquidity or amount of time it takes to convert them into cash.
    Cash and Cash Equivalents
    This just as expected, is money on deposit in the bank, cash on hand
    (petty cash) and highly liquid securities such as Treasury bills.
    Marketable Securities
    Excess or idle cash that is not needed immediately may be invested in
    marketable securities. These are short-term securities that are readily salable and
    usually have quoted prices. These may include:
    1. Trading securities debt and equity securities, bought and sold
    frequently, primarily to generate short-term profits and which are
    carried at fair market value. Any changes in such values are included in
    earnings. (Fair market value is the price at which a buyer and seller are
    willing to exchange an asset in other than a forced liquidation)

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