Financial statements
| English | Chinese | Pinyin |
|---|---|---|
| financial statements | 财务报表 | cái wù bào biǎo |
| income statement | 利润表 | lì rùn biǎo |
| revenue | 营业收入 | yíng yè shōu rù |
| cost of sales | 销售成本 | xiāo shòu chéng běn |
| gross profit | 毛利润 | máo lì rùn |
| operating profit | 营业利润 | yíng yè lì rùn |
| statement of financial position | 财务状况表 | cái wù zhuàng kuàng biǎo |
| assets | 资产 | zī chǎn |
| liabilities | 负债 | fù zhài |
| equity | 所有者权益 | suǒ yǒu zhě quán yì |
| balance sheet | 资产负债表 | zī chǎn fù zhài biǎo |
The story the numbers tell
- Every business keeps score with two key documents: one shows whether it made a profit, the other what it owns and owes.
- Together, these financial statements 财务报表 reveal the firm's health.
Financial statements flow
See how business events become the statements users read.
Revenue is 250 and cost of sales is 160. What is the gross profit?
Gross profit = 250 − 160 = 90.
Gross profit is 90 and expenses are 55. What is the operating profit?
Operating profit = 90 − 55 = 35.
Revenue minus cost of sales gives ______ profit.
Gross profit, before expenses are deducted.
The income statement 利润表
- The income statement shows revenue 营业收入, costs and profit over a period.
- Revenue − cost of sales 销售成本 = gross profit 毛利润; gross profit − expenses = operating profit 营业利润.
Worked example. Revenue 200, cost of sales 120 → gross profit = 80. Expenses 50 → operating profit = 80 − 50 = 30.
The statement of financial position 财务状况表 balances: assets 资产 equal liabilities 负债 plus equity 所有者权益
On the statement of financial position, total assets always equal:
Assets = liabilities + equity — the balance sheet balances.
The statement of financial position
- Also called the balance sheet 资产负债表, it shows assets, liabilities and equity at a point in time.
- It always balances: assets = liabilities + equity.
Which is a current asset?
Cash is a current asset; buildings and machinery are non-current.
Assets and liabilities
- Non-current assets (machines, buildings) vs current assets (cash, inventory, debtors).
- Current liabilities (due within a year) vs non-current liabilities (long-term loans).
You've got it
- the income statement: revenue − cost of sales = gross profit; − expenses = operating profit
- the statement of financial position shows assets, liabilities and equity (assets = liabilities + equity)
- assets and liabilities split into current (≤1 year) and non-current