BUS101: Introduction to Business

4.1: Components of an Income Statement

• Leslie Lum's Introduction to Business: Readings and Workbook: "Module 4: Accounting, Financial Analysis, and Banking"

  Read Module 4 of Introduction to Business on pages 206-247.
• Exploring Business: "Chapter 12: The Role of Accounting in Business," "Chapter 13: Managing Financial Resources," and "Chapter 14: Personal Finances"

  Read chapters 12 through 14. You may advance from Chapter 12 to the subsequent chapters by clicking the "Next Chapter" hyperlink at the top right of each page. Complete the exercises at the end of each section.

• 4.1.1: Understanding Financial Statements

  • Exploring Business: "Section 12.2: Understanding Financial Statements"

    Take another look at pages 207-209 of Introduction to Business for information on income statements. Then, review section 12.2 from Exploring Business again for an overview of the functions of the basic financial statements: income statement, balance sheet, and statement of owner's equity. These documents serve as guidelines for making intelligent business decisions.
    

• 4.1.2: Key Financial Ratios Using the Income Statement

  • Exploring Business: "Section 12.3: Accrual Accounting" and "Section 12.4: Financial Statement Analysis"

    Re-read pages 211-213 of Introduction to Business for more information on income statement analysis. Then, review sections 12.3 and 12.4 from Exploring Business to learn how to evaluate your company's success based on the income statement and ratio analysis. For your review of section 12.3, focus on the material under "The Income Statement" heading and walk through the business scenario with the College Shop, which will allow you to determine if in fact this company made any money.