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FINANCIAL
MANAGEMENT
For Engineers
Ismail Ab.Wahab
Basic
FINANCIAL
MANAGEMENT
For Engineers
Contents
Understanding Financial Statements
Interpreting Financial Data
Capital Investment Appraisal
Basic
FINANCIAL
MANAGEMENT
For Engineers
Understanding
Financial Statements
UNDERSTANDING FINANCIAL STATEMENTS
Financial Statements
INCOME STATEMENT
The income statement
(or profit & loss account)
presents a summary of
revenues for a specific
period of time
The income statement
shows net profit
(revenues – expenses).
UNDERSTANDING FINANCIAL STATEMENTS
A simple format for an INCOME STATEMENT:
Revenues – Expenses = Net Profit
BALANCE SHEET
Equity (Owner’s or
shareholders’ equity)
is ownership interest
of shareholders.
UNDERSTANDING FINANCIAL STATEMENTS
The basic format of the BALANCE SHEET
Assets = Liabilities + Equity
Classification of
liabilities:
Long-term liabilities –
obligations that can be
settled after more than
one year.
Current liabilities –
liabilities that have to be
paid within one year.
UNDERSTANDING FINANCIAL STATEMENTS
RELATIONSHIP BERTEEN FINANCIAL STATEMENTS
INCOME
BALANCE SHEET
CASH FLOW STATEMENT STATEMENT
UNDERSTANDING FINANCIAL STATEMENTS
RELATIONSHIP BERTEEN FINANCIAL STATEMENTS