Financial Reports

What this video covers

• The balance sheet equation (Assets = Liabilities + Owners' Equity) and why every transaction hits at least two accounts to keep the equation in balance
• The income statement flow from revenue through COGS, gross profit, operating expenses, operating income, non-operating items, EBT, and net income, and why "bottom line" always means net income
• Why operating income and earnings before taxes (EBT) are not interchangeable, and why EBT and pre-tax income are the exact same figure
• What earnings before interest, taxes, depreciation, and amortization (EBITDA) measures and why it is not a generally accepted accounting principles (GAAP) measure
• How the statement of cash flows uses the indirect method starting from net income, and why depreciation and amortization are added back as non-cash expenses
• Why interest paid, interest received, and dividends received are operating activities, but dividends paid are always financing activities
• The four auditor opinion types (unqualified, qualified, adverse, disclaimer of opinion) and what each signals about financial statement reliability
• The purpose and timing of SEC filings: Form 10-K (annual, audited), Form 10-Q (quarterly, unaudited), Form 8-K (material events, four business days), and the proxy statement