Question:

Why isn't the Income Statement affected by changes in Inventory?

Answer hidden.

Answer:

Working capital changes do not appear on the Income Statement.

For Inventory, the expense is only recorded when the goods are sold. It doesn't count as Cost of Goods Sold or Operating Expense if it is sitting in a warehouse - only when the company sells it.

Other

Accounting

Accounting

Where can you find Depreciation on the Income Statement?

Accounting

How do you calculate Free Cash Flow?

Accounting

What happens to the three financial statements if we use PIK interest?

Accounting

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Accounting

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Accounting

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Accounting

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Accounting

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Accounting

What is the relationship between CapEx and Depreciation?

Accounting

Walk me through how $10 of Depreciation affects the three financial statements

Accounting

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Accounting

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Accounting

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Accounting

What is working capital?

Accounting

What are some examples of non-recurring charges that would be added back to a company's EBITDA?

Accounting

How does a company decide when to capitalize or expense a purchase?

Accounting

How is goodwill calculated?

Accounting

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Accounting

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Accounting

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Accounting

Does Goodwill get amortized?

Accounting

What is goodwill?

Accounting

Walk me through the three financial statements

Accounting

If depreciation is a non-cash expense, why does it affect the cash balance on the Cash Flow Statement?

Accounting

What is Goodwill Impairment?

Accounting

What flows into Retained Earnings?

Accounting

What are some of the major line items on the Balance Sheet?

Accounting

How does $10 of Depreciation affect the three financial statements?

Accounting

What is Operating Margin?

Accounting

What is gross margin?

Accounting

What are some of the major line items on the Cash Flow Statement?

Accounting

What is the difference between goodwill and intangible assets?

Accounting

A company makes a $100 cash purchase of equipment on Dec. 31. How does this impact the three statements this year and next year?