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Author Topic: Income Statement, Cash Flow, Balance Sheet  (Read 301 times)

fernank3

  • Former member
Income Statement, Cash Flow, Balance Sheet
« on: February 24, 2016, 02:17:17 PM »
Hi,

I just started out this sim so I have a lot of questions. However, I do want to ask ....

There are a lot of numbers in Income Statement, Cash Flow, and Balance Sheet. How much of these numbers do we have to pay attention? Currently I am only looking at the net profit/loss.

Additionally, I saw taxes are not yet deducted from the profit gain. Are there anything else that is going to be deducted? (i.e staff wage, a/c payments?)

Please help!


Thanks in advance!

Offline Sami

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  • Posts: 14540
    • AirwaySim - Are you the next Richard Branson?
Re: Income Statement, Cash Flow, Balance Sheet
« Reply #1 on: February 24, 2016, 02:39:11 PM »
The manual explains the details of the accounting system: http://www.airwaysim.com/game/Manual/Office/Accounting/

Basic things to look at:

* Cash flow statement -> Net change in cash flows (= are you gaining or loosing money) and Net operating cash flow (= is your actual flight operations gaining or loosing money)

* Income statement -> Profit / loss before taxes for the big picture and everything else to see what is costing you.

Taxes are paid weekly, and balanced at the end of the year.

Offline gazzz0x2z

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  • Posts: 1393
Re: Income Statement, Cash Flow, Balance Sheet
« Reply #2 on: February 24, 2016, 03:40:24 PM »
Said otherwise : the income statement gives you an idea on how healthy your operations are, while the cash-flow statement helps you checking you're not bleeding money, or to know what is your financing capacity.

When you're paying back big loans, your cash-flow can be dangerously in the red, even if your operations are positive. That kind of things mean you are in short-term danger, but if you survive, you should be healty.

When you bought your planes, you can have the reverse situation : a positive cash flow, but real losses, counting the airplane depreciation. It's a long term problem, because you don't make enough money to prepare the replacement of your planes when they'll get old.

Said still another way : the cash-flow statement tells you what are your short-term options/problems. The income statement tells you if your long-term management is sound.

fernank3

  • Former member
Re: Income Statement, Cash Flow, Balance Sheet
« Reply #3 on: February 24, 2016, 10:55:52 PM »
Said otherwise : the income statement gives you an idea on how healthy your operations are, while the cash-flow statement helps you checking you're not bleeding money, or to know what is your financing capacity.

When you're paying back big loans, your cash-flow can be dangerously in the red, even if your operations are positive. That kind of things mean you are in short-term danger, but if you survive, you should be healty.

When you bought your planes, you can have the reverse situation : a positive cash flow, but real losses, counting the airplane depreciation. It's a long term problem, because you don't make enough money to prepare the replacement of your planes when they'll get old.

Said still another way : the cash-flow statement tells you what are your short-term options/problems. The income statement tells you if your long-term management is sound.


Thank you. This helps a lot.

Offline Mr Yoda

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  • Posts: 848
Re: Income Statement, Cash Flow, Balance Sheet
« Reply #4 on: February 26, 2016, 12:22:15 AM »
Income Statement tell you how much profit/loss are you making in relation to the expenses including tax.
Cash-Flow statement tells you in how much money is going out or into your company over a period of time plus how much have you got.
Balance Sheet tells you the value of the assets you have in relation to any liabilities you have. Written up only once a year.

When you bought your planes, you can have the reverse situation : a positive cash flow, but real losses, counting the airplane depreciation. It's a long term problem, because you don't make enough money to prepare the replacement of your planes when they'll get old.
Actually if you buy a plane then there is a negative cash flow because you have paid money to obtain it. Income statement won't show up anything except for depreciation expense after time because a plane is an asset so it's going to increase your asset value in a Balance Sheet and give almost zero effect for profit/loss. Planes after time will depreciate so it will lose value and lower your asset value in BS.   

 

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