My friend Nisha's explanation of various finance concepts, which I am woefully uneducated on.read more
Income statement (also known as P&L): Also for a period of time, start of the fiscal. This has all your revenue, and all your costs for the fiscal year. Revenue - expense = net income. Arbitrary choice for when their fiscal year starts. You have to make sure that you're not choosing a time frame or something. P&L will always be corrected, that means if in the fiscal year you make as sale and get $100, but you incur a cost for that sale in two years, you'd include that cost during this fiscal year.
Balance Sheet: Just for a single time. It's a snapshot. Assets, Liabilities, Owner's Equity. Owner's equity is essentially your assets - liabilities, it's like
Statement of Cash flows: in the year, what did you spend cash on, and what did you get cash for. Matters for making sure you don't run out of cash. It's for a period of time, usually the fiscal year.
Depreciation is for tangible assets: like a computer, its value as an asset goes down over time. You add a depreciation expense each year, which is to reflect the fact that the value of this computer is going down over time.
Amortization is for intangible assets: like a copyright, say you only have it for 10 years, then you have amortized expense which you incur each year, to show that the value of the copyright is going down.
Dividends: so as the company slows its growth, and it doesn't make as much sense for the company to investing its revenue into growth, then the shareholders want to see their owners equity go up, so them essentially to stop spending it (this in turn should increase their stock price, because the company is just worth more in terms of assets). Moreover, to keep shareholders happy, they may choose to give dividends (some of the cash profits) from the company to shareholders.