The balance sheet

Introduction to Financial Statements in Power BI

Nikisha Alcindor

Investor and Data Scientist

Expectations

  • This is an intermediate course
    • Familiar with DAX and Data Modeling in Power BI

  • Prerequisites

    1. Introduction to DAX in Power BI
    2. Data Modeling in Power BI

  • No finance experience needed!

Introduction to Financial Statements in Power BI

Introduction to financial statements

An image of the 4 financial statement: Balance sheet, Income statement, Cash Flows and Equity statement

1 https://www.investopedia.com/terms/f/financial-statements.asp
Introduction to Financial Statements in Power BI

Introduction to financial statements

Income statement and balance sheet

Introduction to Financial Statements in Power BI

The accounting equation

A diagram of the basic accounting equation.

  • Incorporates financial information of a firm
  • Provides the framework for financial statements
  • Both sides of the equation must be equal
  • Critical to understand the Balance Sheet
Introduction to Financial Statements in Power BI

Assets

A resource a business owns

  • Long-Term Assets - not easily converted to cash in a year.
    • Equipment
    • Property
  • Current Assets - cash or easily converted to cash in a year.
    • Cash
    • Inventory

Total Assets = Long-Term Assets + Current Assets

A photo of cars in a mechanic shop

Introduction to Financial Statements in Power BI

Liabilities

  • Claims against assets (Debts and Obligations)
    • Creditors (the person for whom money is owed)
    • Accounts Payable (Unpaid Invoices)
    • Notes Payable (Loans)
    • Salaries and Wages Payable

A photo of a loan agreement.

Introduction to Financial Statements in Power BI

Owner's equity

Owners Claim on an Asset

  • Investment by owner
    • Owner's (or Shareholder's) Capital
    • Owner's Drawings

Everyone taking a piece of the pie

Introduction to Financial Statements in Power BI

Summary of the accounting equation

A diagram of the basic accounting equation.

  1. Assets are resources owned by the firm.
  2. Liabilities are debts the firm owes.
  3. Owner's Equity is money the owners put into the firm (minus any money taken out of the firm).
Introduction to Financial Statements in Power BI

Opening a lemonade business

lemonade stand

  • Assets = Liabilities + Owners' Equity
  • You invest $100 to open a lemonade stand.
  • 100 = 0 + 100
  • You take out a company loan of $500 to buy professional equipment and a freezer
  • 600 = 500 + 100
Introduction to Financial Statements in Power BI

Balance sheet

Balance sheet

  • Reports the assets, liabilities and owner's equity
  • Snapshot of the company's financials at a specific moment in time
  • Adheres to the accounting equation
  • Snapshot at what a company owns or owes
Introduction to Financial Statements in Power BI

Larry's Automotive

An image of an engineer analyzing data on a Ipad at a car company

Introduction to Financial Statements in Power BI

Let's practice!

Introduction to Financial Statements in Power BI

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