Lesson 4 - Accounting can be greatly simplified.

Income Statement
+ Net Revenue or Net Sales
- Cost of Goods Sold (COGS) or Cost of Sales (COS)
= Gross Profit
- Selling, General, and Administrative (SG&A)
= Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- Depreciation and Amortization (D&A)
- Stock-Based Compensation (SBC)
= Earnings Before Interest and Tax (EBIT) or Operating Income
- Interest
= Earnings Before Tax (EBT)
- Current Tax
- Deferred Tax
= Earnings After Tax (EAT) or Net Profit or Net Income

Cash Flow Statement
+ Net Income
+ D&A
+ SBC
+ Deferred Tax
+ Other Non-Cash Items
= Cash Flow from Operating (CFO) before Working Capital
- Change in Accounts Receivable
- Change in Inventory
- Change in Accounts Payable
- Other Changes in Net Working Capital
= Cash Flow from Operating (CFO)

- Capital Expenditure
- Acquisition
+ Divestiture
= Cash Flow from Investing (CFI)

+ Net Equity Issuance
+ Net Debt Issuance
= Cash Flow from Financing (CFF)

+ Cash Flow from Operating (CFO)
+ Cash Flow from Investing (CFI)
+ Cash Flow from Financing (CFF)
= Change in Cash

+ Beginning Cash
+ Change in Cash
= Ending Cash

Balance Sheet
+ Cash
+ Marketable Securities
+ Accounts Receivable
+ Inventory
= Current Assets or Short-Term Assets

+ Gross Property, Plant, and Equipment (Gross PP&E)
- Accumulated Depreciation
= Net PP&E
+ Intangible
+ Goodwill
= Non-Current Assets or Long-Term Assets or Fixed Assets

+ Current Assets
+ Non-Current Assets
= Total Assets

+ Accounts Payable
+ Current Debt or Short-Term Debt
= Current Liabilities or Short-Term Liabilities

+ Long-Term Debt
= Non-Current Liabilities or Long-Term Liabilities

+ Current Liabilities
+ Non-Current Liabilities
= Total Liabilities

+ Common Stock
+ Retained Earnings
= Total Shareholders' Equity

+ Total Liabilities
+ Total Shareholders' Equity
= Total Liabilities and Shareholders' Equity

Total Assets = Total Liabilities + Total Shareholders' Equity

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