Identify net worth and profit-and-loss (P&L) statements.

Identification should include purpose and interpretation of the following financial statements:

Process/Skill Questions:

What is meant by the net worth of a business?
How is net worth calculated?
What are liabilities? How are they identified?
How would a loan institution use one’s net worth to determine loan qualification?
What is the difference between current and non-current liabilities?
What is meant by non-cash income?
What is an example of a non-cash expense?
How does a business use a P&L statement?
What is the difference between a cashflow and a P&L statement? When should one evaluate a P&L statement?