BUS–A 201 at Indiana University--Bloomington













Assets = Liabilities + Shareholder's Equity (Or Owner's Equity)
Contributed Capital
+ Retained Earnings
Shareholder's Equity (or Owner's Equity)
Beginning RE
+ Net Income
– Dividends
Ending RE
Revenues
– Expenses
Net Income
Sales
– COGS
Gross Profit
– Operating Expenses
Total Income From Operations
– Non-Operating Expenses
Income Before Taxes
– Tax Expense
Net Income
(This is the Multi-Step Income statement)
Current Ratio = Current Assets / Current Liabilities
Working Capital = Current Assets – Current Liabilities
Profit Margin = Net Income / Sales Revenue
Sales
– COGS
Gross Profit
Gross Profit Margin = Gross Profit / Sales Revenue
Gross Profit Ratio is the same as Gross Profit Margin