5.3 Income Statements and 5.4 Balance Sheets IGCSE Business Studies

In this lesson I cover:

What profit is and why it is important:

• How a profit is made
• Importance of profit to private sector businesses, e.g. reward for risk-taking/enterprise, source of finance
• Difference between profit and cash
  Income statements:
• Main features of an income statement, e.g. revenue, cost of sales, gross profit, profit and retained profit
• Use simple income statements in decision making based on profit calculations (constructing
• income statements will not be assessed)
• Explaining what Statement of financial position
  The main elements of a statement of financial position:
  • The main classifications of assets and liabilities, using examples
  • Interpret a simple statement of financial position and make deductions from it, e.g. how a business is financing its activities and what assets it owns, sale of inventories to raise finance (constructing statements of financial position will not be assessed)

There is also a Task for students to complete to help them remember this topic.