Task Team of FUNDAMENTAL ACCOUntING hool of Business, Sun Y at-sen University Lesson 10 Understanding and Using financial Statements Exercise Short answer questions 1. What are the possible decisions that can be made with the use of financial analysis? Answer: Share investment decisions. This

Outlines A General View of Financial statements Income statement Balance sheet Statement of owners'equity’ Simple Illustration

Outline Describe the purpose of adjusting accounts at the end of the period. Prepare and explain adjusting entries for prepaid expenses, amortization, unearned revenues, accrued expenses, and accrued revenues. Explain how accounting adjustments link to financial statements

Financial forecasting 1) Project sales revenues and expenses

2 concepts that enhance our understanding of risk... 1) Operating Leverage affects a firm's business risk. 2) Financial Leverage affects a firm's financial risk

6-1: Openness in Goods Market 6-2: Openness in Financial Market 6-3: Conclusions and a Look ahead

5-1.The Goods Market and the IS Relation 5-2: Financial Market and the LM Relation 5-3: The iS-LM- Model: Exercise 5-4: Using a Policy Mix 5-5: Adding Dynamics 5-6: Does the IS-LM Model Actually Capture What Happens in the Economy?

– Ch. 12 Capital Structure Concept – Ch. 13 Capital Structure Management in Practice – Ch. 14 Dividend Policy

– Ch.8 Capital Budgeting and Cash Flow Analysis – Ch.9 Decision Criteria and Option Considerations – Ch.10 Capital Budgeting and Risk – Ch.11 The cost of Capital

Course overview The focus of this course is on financial theory and empirical evidence that are useful for investment decisions. The topics include: Financial theory: This include portfolio theory, CAPM, APT, discount factor model, they are important for decision-making in investments;