Preparation should include purpose and interpretation of

• balance sheets
• income statements
• cashflow statements
• the relationship between profitability, liquidity, and solvency.

Process/Skill Questions:

• What are liabilities? How are they identified?
• How can individuals improve their net worth?
• How would a loan institution use one’s net worth to determine qualification for a loan? What is the difference between current and non-current liabilities?
• What is meant by non-cash income?
• What is an example of a non-cash expense?
• How does a business use a P&L statement?
• What is the difference between cash flow and a P&L statement?
• When should one evaluate a P&L statement?