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Guide to Financial Statements: Intro
The Basics
One of the first things you should do if you want to get into the business side of biotechnology is familiarize yourself with financial statements and basic accounting. Luckily, a degree in accounting or finance is not a prerequisite. There are no nested, partial-differential equations or partition functions involved, and in fact, if you’ve ever read a box score or a recipe, you should be able to master the basics. Of course, you still won’t be an accountant, just as knowing basic anatomy doesn’t make you a thoracic surgeon, but it’s a necessary start.
What Financial Statements Do
In short, financial statements describe the flow of money; they describe where the money is, where it came from and where it went.
There are four basic financial statements:
- Balance Sheet: It shows what the company owns and what it owes at a fixed point in time.
- Income Statement: Shows how much the money the company made
- Cash Flow: Shows the money exchange between the company and the outside world over a fixed time window.
- Statement of Shareholder Equity: Shows changes in the interests of the company over time.
Continued Reading
Guide to Financial Statements: Income Statements
Guide to Financial Statements: Balance Sheets
Guide to Financial Statements: Cash Flows
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