Get Even More Visitors To Your Blog, Upgrade To A Business Listing >>

How to use Microsoft Excel in finance – Part 3

This time we will look a bit more in depth on how to use Microsoft Excel for financial calculations.

Green Excel icon with text about using Microsoft Excel in finance

What we will look at today is Financial statements and how to use them in order to understand the financial health of a company.

In particular we will look at:

  • Financial statements
    • Balance sheet
    • Income statement
  • The basic difference between accounting (or book) value and market value.
  • The difference between accounting income and cash flow.
  • How to determine a firm’s cash flow from its financial statements.
    • Calculate cash flow.
  • The difference between average and marginal tax rates.
    • Calculate taxes

Finance not accounting

The first thing to grasp is that we will look at the numbers and look at them through the eyes of people in finance.

They use the numbers differently than the people in accounting and we will show you how.

Balance sheet

In the last article we talked about this formula:

Assets = Liabilities + Equity

Everyone in finance is using this equation and not just in finance but also in accounting.

What the Balance sheet does is that it reflects the equation.

The Balance sheet is a snapshot of the Firm’s account balances at the last day of the reporting period.

Hypothetical Balance Sheet of ABC Corporation (Current assets, Non-current assets and Total assets).

Figure 1. Hypothetical Balance Sheet of ABC Corporation (Current assets, Non-current assets and Total assets).

This article is one in a series. You can read Part 1 here and Part 2 here.

The post How to use Microsoft Excel in finance – Part 3 appeared first on LJ Nissen's blog.



This post first appeared on LJ Nissen Investments, please read the originial post: here

Share the post

How to use Microsoft Excel in finance – Part 3

×

Subscribe to Lj Nissen Investments

Get updates delivered right to your inbox!

Thank you for your subscription

×