The Balance Sheet – Illustrative Accounts
ASSETS
Cash legally set aside (e.g.,
escrow for self-insurance or
loan repayment)
Liquid short-term securities
that have a maturity of less
than a year
Money you expect to receive
from customers (owed less an
allowance for nonpayment)
Receivables with payment
plans (e.g., store credit cards,
auto manufacturer loans)
Prepayment for items such as
insurance and rent
Arises when net income
recognized for GAAP
accounting purposes differs
from net income used for tax
purposes; can also show up
as a liability
PP&E (Gross) less
accumulated depreciation
Type of an intangible asset
that arises when an acquirer
pays more than the appraised
value of identifiable net
assets (e.g., inventory, PP&E,
non-goodwill intangible
assets, net of liabilities)
Could include items such as
patents, trademarks,
copyrights, trade secrets,
brand name, customer lists,
etc.
Based on materials provided by O. Even-Tov (UC Berkeley)
LIABILITIES & SHAREHOLDERS’ EQUITY
Current Assets Cash equivalents are highly
liquid, short-term securities
Cash and Cash Equivalents (e.g., 30-day Treasury Bills)
Restricted Cash
Expenses that have occurred
but not yet paid for, such as
Short-term Marketable Securities
wages or utilities
Accounts Receivable, net
Revenue that we have
Financing Receivables received cash for, but cannot
be recognized by the
Inventory company because it has not
been earned yet
Prepaid Expense
Taxes owed by various
Deferred Tax Assets
government agencies to the
Income Tax Receivables company
Other Current Assets Can include items such as
advances to suppliers,
receivables from employees,
undeposited checks, etc.
Non-Current Assets
Securities that have a
Long-term Marketable Securities maturity of more than a year,
including equities, that the
Property, Plant and Equipment, net
company intends to hold
Goodwill
The value of all common
Other Intangible Assets stock issued at par value
Other Assets Takes into account
unrealized gains or losses on
items such as securities,
Can include
items such as exchange rate derivatives
deferred charges, and pension assets
Total Assets non-current
receivables, etc. The portion of equity
ownership in a subsidiary
that is not attributable to the
parent company; also
referred to as “minority
interest”
Current Liabilities
Accounts Payable
Accrued Expenses / Accrued Liabilities
Deferred Revenue
Income Tax Payables
Current Portion of Long-term Debt
Capital Lease Obligations, current portion
Non Current Liabilities
Deferred Revenue, non-current
Long-term Debt and Capital Leases
Convertible Debt
Other Non-current Liabilities
Total Liabilities
Shareholders’ Equity
Common Stock
Additional Paid-in Capital
Retained Earnings
Other Comprehensive Income / (Loss) Ending Balance Retained
Noncontrolling Interest
Total Shareholders’ Equity
Total Liabilities & Shareholders’ Equity
Money owed to vendors and
suppliers
Taxes that must be paid to
the government within a year
The portion of debt that is
due within 12 months
Obligations for capital lease
payments due within the
next 12 months
A type of hybrid security
that allows the debtholder to
convert to equity
Could include items such as
pensions, or financial
liabilities such as derivatives
Excess amount received
from shareholders over the
par value of the common
stock
Earnings = Beginning
Balance Retained Earnings +
Net Income - Dividends
 The Income Statement – Illustrative Accounts
Also referred to as “Sales”; Could potentially show
up as multiple lines on the income statement (E.g.,
product revenue and service revenue)

Revenue $100,000

Includes the direct cost associated with generating Cost of Sales / Cost of Service / Cost of Goods Sold (50,000)
the revenue (E.g., materials, wages and depreciation
of equipment directly associated with producing the Gross Profit $50,000
good or service)

Research and Development Expense ($5,000)

Any cost that is not directly attributable to
producing the good or service; Sometimes referred General and Administrative Expense ($5,000)
to as “indirect costs” or “overheard”.
Sales and Marketing Expense ($5,000)

Financial income or interest that is non-operating in Total Operating Expenses $15,000

nature (Note: in some industries, such as financial
services, this may be a part of the company’s core
operations so it would show up as revenue)
Operating Income / (loss) $35,000
Other non-operating income or expense (e.g., non- Interest Income / (expense) ($1,000)
operating rent income or gain on PP&E sale)
Other Income / (expense) ($500)
Also known as “provisions for income taxes”; This
number differs from the actual tax paid as it is an Income (loss) Before Income Tax $33,500
estimate and may be different from the final tax bill
(similar to tax withholding)
Income Tax Expense ($13,500)

Net Income / (loss) from Continuing Operations $20,000

Income or loss from a segment of the company’s
business that has been sold, disposed or abandoned Net Income / (loss) from Discontinued Operations $250
Income or loss for a company which is infrequent Extraordinary Income (loss) ($1,000)
and unusual in nature, and is unlikely to recur in the
foreseeable future (e.g., tidal wave in Chicago; Consolidated Net Income $19,250
includes ‘badwill’ – the opposite of goodwill from
acquisition) Less: Consolidated Net Income from non-controlling Interest ($1,250)

Income or loss generated from subsidiaries that is Consolidated Net Income Attributable to Parent Company $18,000
not attributable to the parent company

Also referred to as “Earnings Per Share”. The first Profit Per Common Share $1.80
uses “basic shares outstanding” as the denominator
whereas the latter uses “fully diluted shares Profit Per Common Share – Diluted $1.75
outstanding”, which includes the effects of RSUs,
options, etc.