BoK Statement

Define the financial statements produced for a business, such as:
- Statement of Financial Position
- Statement of Comprehensive Income
- Statement of Changes in Equity
- Statement of Cash Flows
- Statement of Management Discussion and Analysis
Explain the importance of the notes that accompany a business’ financial statements.
Explain how a business’ financial statements may be used.
Define the level of assurance service provided for a business’ financial statements.
- Compilation
- Review
- Audited
Define the reports that may accompany a business’ financial statements.
- Notice to Reader
- Review Engagement
- Audited
Compare the levels of assurance service provided for a business’ financial statements.
Define liquidity ratios, such as:

Define debt ratios, such as:
- Interest Coverage Ratio
- Debt-to-Assets Ratio
- Debt-to-Equity Ratio
Define profitability ratios, such as:
- Gross Profit Margin
- Operating Profit Margin
- Net Profit Margin
- Return on Assets
- Return on Equity
Explain how a business’ financial ratios may be used.
Define the types of approaches that may be used to value a business, such as:
- Going-concern
- Liquidation
- Discounted future earnings
- Market value

Glossary of Verbs (mouse over to see definition)

Define

To state exactly the meaning of

Identify

To be aware of / to recognize and correctly name / to locate an appropriate resource

Explain

To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it

Compare

To note the similarities and differences between two or more things

Estimate

To determine an approximate value for

Calculate

To find the value using mathematics

Convert

To change from one form or purpose to another

Evaluate

To reach a conclusion or make a judgement through careful study

Interpret

To give the meaning of / to construe or understand / to translate orally

Read more about the Taxonomy used in the FP-BoK

Financial Planning Body of Knowledge