P/L and business numbers

- [Instructor] At this point, looking at this movie title, you might be asking what the heck P and L is. The world of finance, like the world of tech, is full of jargon. In order to be an executive manager, it will be important that you understand some of the basic accounting terms and what they mean. Oh, and P and L means profit and loss. The best way to think about this is that there are a few key accounting elements you should be able to read. Balance sheets, income statements and cash flow statements. And if you're at a larger company or intend to grow with your company, you should definitely know how to create budgets and forecasts. Let's take a look at these documents. The balance sheet is also called a statement of financial position. It's purpose is to show the company's assets, liabilities and owner's equity. This document is used for investors to get an insight into the company's value and financial proposition. In one section of the balance sheet are the types of assets…