Statements (T) Or (F) 1- 2- 3- A company's gross profit does more than simply represent the difference between net sales and the cost of sales. Gross profit provides the resources to cover all of the company's other expenses. Liabilities and Stockholders' Equity the left-hand side of the balance sheet Every firm must have some cash on hand at all time because cash expenditures can sometimes exceed cash receipts The balance sheet equation is Total Assets = Total Revenues - Total Liabilities Net profit margin is equal to the gross profit margin minus the operating profit margin Fixed assets are assets whose balances will remain the same throughout the year The statement of cash flow explains the changes that took place in the firm's cash balance over the period of interest + 5- 6- 7