Financing Statement

  

See: Financial Statement. And then note that financing usually means that the company raising dough is doing it in one of two ways. Either they are selling ownership stakes in them, or they are borrowing money in the form of debt, such that they then have an obligatoin to pay back that loan...or else. And that "or else" thing usually means that they lose ownership of the company if they don't.

The financing statement covers the myriad legal and financial risks in making all this magic happen.

Related or Semi-related Video

Finance: What is a registration statemen...2 Views

00:00

finance a la shmoop what is a registration statement....Hi I'm a

00:08

registration statement okay there I said [Uncle Sam poster talking]

00:10

it that's a registration statement alright

00:12

what am I good for well if you want to go public that is raise money from Joe [Joe Sixpack and Josephine Sixpack appear]

00:17

Sixpack and his wife Josephine well then you have to jump through all kinds of

00:21

hoops the most important of which is that you have to file a prospectus with

00:25

the Securities Exchange Commission or SEC all right what's a prospectus[Prospectus with SEC badge]

00:30

it used to be an amateur spectus but the well then it took some continuing ed

00:34

classes owned expecting skills and it turned pro and took money all

00:38

right well a prospectus basically just outlines all of the information that the

00:42

SEC deems is key to the offering like trailing revenues and profits and growth

00:48

the units sold, any lawsuits outstanding against the company, distribution,

00:53

contracts with vendors patents who the management is debts owed and on and on [examples of what is outlined in a prospectus]

00:59

why the need for all this registration well because so many unsuspecting

01:04

investors who likely didn't watch this video well they got taken taken in the [Person picks up red phone]

01:09

past yeah farmers, not educated government came to their aid they

01:12

invested in some sleazy thing that wasn't run through the SEC and now

01:16

they're walking around in a barrel saying we'll uh shmoop for food yeah [Man walking in a barrel]

01:21

good luck you know the phrase a barrel of fun yeah this is not what it's

01:24

referring to [Man walking inside a barrel and a tiger appears]

Up Next

Cost Accounting: What is the Difference Between Income Statements for Manufacturing, Service and Retail?
12 Views

What is the difference between income statements for manufacturing, service, and retail? Income statements differ between industries simply because...

Finance: What is a Consolidated Income Statement?
12 Views

What is a Consolidated Income Statement? Consolidated income statements (or any financial statements) are just the statements of all businesses wit...

Finance: What is a Bubble?
5 Views

What is a Bubble? In markets and economic cycles, any kind of rapid run up trend characterized by over exuberance and emotion over fundamentals tha...

Find other enlightening terms in Shmoop Finance Genius Bar(f)