Business Studies·The accounting function · NSSCO 2.4
Financial statements: concepts, profit vs cash & their users
Narrated lesson · press play
Every business keeps two big money reports: one that shows the profit it made over a year, and one that shows what it owns and owes on a single day. In this lesson we meet both statements, define every money word plainly with Namibian dollar examples, work out gross profit, net profit and working capital on the board, and learn the surprising truth that a profitable business can still run out of cash. Finally we meet all the different people who use these statements and why they care.
What you'll learn in this lesson
By the end you should be able to (NSSCO Business Studies 2.4):
- Recognise and use the following concepts: income, expenses, gross profit, net profit, capital employed, employment of capital, owner's equity, drawings, assets (non-current and current), liabilities, working capital
- Explain the difference between profit and cash
- Distinguish between retained profit and spendable cash (use calculations if needed)
- Identify and explain the users of financial statements
Loading your lesson…
You're watching a free 3-minute preview — create a free account to keep going.
Quick revision
Revise this in 5 minutes
Miss Maria and Mike talk through the whole topic — with the figure and working drawn live.