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Making money in a company isn't a straightforward process as scholars discover in this clip on the basic income statement. Sal explains what this is and lays out a scenario showing the various subtractions a company makes from their revenue to get the money actually paid to owners. He incorporates variable and fixed costs to get the gross profit and then further subtracts for the operating profit, pre-tax profit, and net income. Learners view a simple balance sheet and explore the return on assets ratio as well as a return on equity percentage.
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