Overview of financial statements

Remember that finance is about identifying necessary resources, figuring out how to get the money to buy those resources, and then managing those resources efficiently once you have them. To identify and determine and manage, you need information. That's where the financial statements come in. So we need to talk about accounting for just a minute. Now, don't be afraid of accounting. It's fun. And we will only be talking about it for a few minutes. So what is accounting? Accounting is quantitative information, accounting is numbers about money. So it's financial. And accounting is meant to be practical, useful. Accounting is not meant to be just a theoretical exercise. Although accounting theory is great, accounting is designed to be useful in making decisions. We use accounting information from the past to make decisions in the present to change the future. That's accounting. Here is what we're going to discuss as we introduce accounting. First, we will discuss the financial…