ACCOUNTING FOR NON-ACCOUNTANTS

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "ACCOUNTING FOR NON-ACCOUNTANTS"

Transcription

1 Deutsch and Chikarovski's ACCOUNTING FOR NON-ACCOUNTANTS A Question and Answer Handbook Robert Deutsch and Kris Chikarovski THE FEDERATION PRESS 2012

2 Preface - x Who is this book for? x What is in this book? x Who we are xi Thanks xi SECTION 1 - ACCOUNTING FUNDAMENTALS 1.01 Overview 1 1. What is accounting? 1 2. Why is accounting important? 2 3. What are the main sources of accounting information? 2 4. Who are the key users of accounting information? 3 5. What can accounting information tell me about an accounting entity? 3 6. How can I use accounting information to gain an understanding of an accounting entity? 4 7. Where can I find accounting information about an accounting entity? The Language of Accounting 5 8. What is the fundamental equation at the heart of accounting information? 5 9. What is the meaning of the key elements of the accounting equation? What does double entry bookkeeping mean? Fundamental Concepts of Accounting What are the fundamental concepts that underpin accounting? How does the concept of the accounting entity and the accounting period influence how you review accounting information? What are the implications of the historical cost concept? How are historical costs modified in certain circumstances? How does the concept of the going concern influence accounting information? How does the concept of depreciation influence accounting information? Fundamental Principles of Accounting How does the principle of accrual accounting influence accounting information? How does the realisation principle influence accounting information? How does the matching principle influence accounting information? How does the balance day adjustments principle influence accounting information? 16 VI

3 SECTION 2 - MAIN SOURCES OF ACCOUNTING INFORMATION 21. What are the four critical financial statements? Why are the notes to the financial statements important? What are some of the key items typically included in the notes to the financial statements? What is the time period covered by the four financial statements? How are the four financial statements related to each other? The Statement of Financial Position (Balance Sheet) What financial information does a Statement of Financial Position (Balance Sheet) generally contain? How is a Balance Sheet usually presented? What are assets? How do current assets and non-current assets differ? What are Current assets? What are the main types of current assets? What are non-current assets? How are leases of assets treated for accounting purposes? What are property, plant and equipment? What are the main types of property, plant and equipment? How is depreciation calculated? What are intangible assets? What are the main types of intangible assets? What are the key accounting standards controlling the reporting of intangible assets? How does asset impairment testing impact on the reporting of assets? What are liabilities? What are the main types of liabilities? How is shareholders' equity determined? The Statement of Financial Performance (Profit and Loss Statement) What financial information does a Statement of Financial Performance (Profit and Loss Statement) usually contain? Statement of Changes in Equity What financial information does a Statement of Changes in Equity usually contain? What are the key elements of a Statement of Changes in Equity? Cash Flow Statement What financial information does a Cash Flow Statement usually contain? What is treated as cash for the purposes of the Cash Flow Statement? How is a Cash Flow Statement usually presented? What are the key elements of a Cash Flow Statement? How are cash flows reported? 58 vii

4 SECTION 3 - UNDERSTANDING ACCOUNTING INFORMATION 52. What is financial statement analysis? Comparative Analysis What is comparative analysis? What is horizontal analysis? What is vertical analysis? Financial Ratio Analysis What is the concept underpinning financial ratio analysis? What are the three main types of financial ratios commonly used? What are the key liquidity ratios? How do you calculate the current ratio? How do you calculate the quick ratio? How do you calculate the current cash debt coverage ratio? How do you calculate receivables turnover? How do you calculate the average collection period? How do you calculate inventory turnover? How do you calculate average days in inventory? What are the key solvency ratios? How do you calculate the debt to total assets ratio? How do you calculate the liabilities to equity ratio? How do you calculate the times interest earned ratio? How do you calculate the cash debt coverage ratio? How do you calculate free cash flow? What are the key profitability ratios? How do you calculate return on equity? How do you calculate return on assets? How do you calculate the net profit margin? How do you calculate asset turnover? How do you calculate the gross profit margin? How do you calculate operating expenses to sales ratio? How do you calculate cash return on sales ratio? How do you calculate earnings per share? How do you calculate the price-earnings ratio? How do you calculate the dividend payout ratio? Financial Covenant Ratio Analysis What is the concept underpinning financial covenant ratio analysis? What are the key financial covenant ratios usually used? How do you calculate the asset value to net exposure percentage? How do you calculate the debt service cover ratio? How do you calculate the interest cover ratio? How do you calculate the total leverage ratio? How are financial covenant thresholds determined and applied? 91 viii

5 90. What are the typical consequences of breaching any financial covenant thresholds applied? Can manipulation occur in relation to meeting any financial covenant thresholds applied?. 92 SECTION 4 - APPLYING ACCOUNTING INFORMATION TO ASSESS THE FINANCIAL POSITION OF AN ACCOUNTING ENTITY 92. How can I use the accounting information and financial statement analysis to determine the immediate financial health of an entity? How can I use the accounting information and financial statement analysis to determine the ongoing viability of an entity? How can I use the accounting information and financial statement analysis to determine the overall competitiveness of an entity? 95 SECTION 5 - LIMITATIONS OF ACCOUNTING INFORMATION 95. What are the key factors that limit the accuracy of information available from financial statements? How can the financial information available in financial statements be manipulated? How can revenue figures be manipulated? How can expense figures be manipulated? How can asset figures be manipulated? How can liability figures be manipulated? How can cash flow figures be manipulated? How can financial ratio figures be manipulated? How can statistics be manipulated? 106 APPENDICES APPENDIX 1 - Summary of Financial Ratios 110 APPENDIX 2 - Sample Financial Information 112 Part A - Sunshine Pty Ltd 112 Part B - WorleyParsons Limited 115 APPENDIX 3 - Illustration of how Financial Information in Financial Statements can be Manipulated 149 APPENDIX 4-Glossary 151 APPENDIX 5 - Further Reading 163 ix

Income Measurement and Profitability Analysis

Income Measurement and Profitability Analysis PROFITABILITY ANALYSIS The following financial statements for Spencer Company will be used to demonstrate the calculation of the various ratios in profitability analysis. Spencer Company Comparative Balance

More information

Financial ratios can be classified according to the information they provide. The following types of ratios frequently are used:

Financial ratios can be classified according to the information they provide. The following types of ratios frequently are used: Financial Ratios Financial ratios are useful indicators of a firm's performance and financial situation. Most ratios can be calculated from information provided by the financial statements. Financial ratios

More information

Chapter 17: Financial Statement Analysis

Chapter 17: Financial Statement Analysis FIN 301 Class Notes Chapter 17: Financial Statement Analysis INTRODUCTION Financial ratio: is a relationship between different accounting items that tells something about the firm s activities. Purpose

More information

ICAP GROUP S.A. FINANCIAL RATIOS EXPLANATION

ICAP GROUP S.A. FINANCIAL RATIOS EXPLANATION ICAP GROUP S.A. FINANCIAL RATIOS EXPLANATION OCTOBER 2006 Table of Contents 1. INTRODUCTION... 3 2. FINANCIAL RATIOS FOR COMPANIES (INDUSTRY - COMMERCE - SERVICES) 4 2.1 Profitability Ratios...4 2.2 Viability

More information

INTERNATIONAL FINANCIAL STATEMENT ANALYSIS

INTERNATIONAL FINANCIAL STATEMENT ANALYSIS INTERNATIONAL FINANCIAL STATEMENT ANALYSIS Second Edition Thomas R. Robinson, CFA Elaine Henry, CFA Wendy L. Pirie, CFA Michael A. Broihahn, CFA WILEY John Wiley & Sons, Inc. ;;.s»»fi«^ CONTENTS Foreword

More information

What Do Short-Term Liquidity Ratios Measure? What Is Working Capital? How Is the Current Ratio Calculated? How Is the Quick Ratio Calculated?

What Do Short-Term Liquidity Ratios Measure? What Is Working Capital? How Is the Current Ratio Calculated? How Is the Quick Ratio Calculated? What Do Short-Term Liquidity Ratios Measure? What Is Working Capital? HOCK international - 2004 1 HOCK international - 2004 2 How Is the Current Ratio Calculated? How Is the Quick Ratio Calculated? HOCK

More information

CHAPTER 13. Financial Analysis: The Big Picture

CHAPTER 13. Financial Analysis: The Big Picture CHAPTER 13 Financial Analysis: The Big Picture Discuss the Need for comparative analysis and identify the tools of financial statement analysis Throughout the book we will rely on three types of comparisons

More information

BUSINESS BOOKS. Accounting SIXTH EDITION. Peter J. Eisen Assistant Principal Retired Accounting & Business Practice N.YC. Department of Education

BUSINESS BOOKS. Accounting SIXTH EDITION. Peter J. Eisen Assistant Principal Retired Accounting & Business Practice N.YC. Department of Education BUSINESS BOOKS Accounting SIXTH EDITION Peter J. Eisen Assistant Principal Retired Accounting & Business Practice N.YC. Department of Education BARRON'S CONTENTS Preface ix 1 THE ACCOUNTING EQUATION I

More information

CAPITAL GROUP CENTRUM NOWOCZESNYCH TECHNOLOGII SPÓŁKA AKCYJNA

CAPITAL GROUP CENTRUM NOWOCZESNYCH TECHNOLOGII SPÓŁKA AKCYJNA CAPITAL GROUP CENTRUM NOWOCZESNYCH TECHNOLOGII SPÓŁKA AKCYJNA MID-YEAR CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP CNT S.A. AND MID-YEAR CONDENSED SEPARATE FINANCIAL STATEMENT OF CNT

More information

Consolidated balance sheet

Consolidated balance sheet Consolidated balance sheet Non current assets 31/12/2009 31/12/2008 (*) 01/01/2008 (*) Property, plant and equipment 1,352 1,350 1,144 Investment property 7 11 11 Fixed assets held under concessions 13,089

More information

Ratio Analysis. A) Liquidity Ratio : - 1) Current ratio = Current asset Current Liability

Ratio Analysis. A) Liquidity Ratio : - 1) Current ratio = Current asset Current Liability A) Liquidity Ratio : - Ratio Analysis 1) Current ratio = Current asset Current Liability 2) Quick ratio or Acid Test ratio = Quick Asset Quick liability Quick Asset = Current Asset Stock Quick Liability

More information

Financial Forecasting (Pro Forma Financial Statements)

Financial Forecasting (Pro Forma Financial Statements) Financial Modeling Templates Financial Forecasting (Pro Forma Financial Statements) http://spreadsheetml.com/finance/financialplanningforecasting_proformafinancialstatements.shtml Copyright (c) 2009, ConnectCode

More information

Vertical and Horizontal Analysis. Financial Analysis. Lecturer: Dr. Constantinos Adamides

Vertical and Horizontal Analysis. Financial Analysis. Lecturer: Dr. Constantinos Adamides Vertical and Horizontal Analysis Financial Analysis Lecturer: Dr. Constantinos Adamides Horizontal Analysis Comparison of financial information of a single company for two more years Examination of absolute

More information

Financial/Accounting Analysis Ratios Excel Calculator

Financial/Accounting Analysis Ratios Excel Calculator User Guide Financial/Accounting Analysis Ratios Excel Calculator Dec 2008 Version 2 copyright 2008 Business Tools Templates Financial/Accounting Analysis Ratios Excel Calculator Financial Analysis Ratios

More information

ACC 120 PRINCIPLES OF FINANCIAL ACCOUNTING

ACC 120 PRINCIPLES OF FINANCIAL ACCOUNTING ACC 120 PRINCIPLES OF FINANCIAL ACCOUNTING COURSE DESCRIPTION: Prerequisites ENG 090, and RED 090 or DRE 098; MAT 070 or DMA 010, 020, 030, 040, or satisfactory score on placement test Corequisites: None

More information

Chapter. Statement of Cash Flows For Single Company

Chapter. Statement of Cash Flows For Single Company Chapter 4 Statement of Cash Flows For Single Company 4.1 Single company statement of cash flows Statement of cash flows are primary financial statements and are required along side the income statement

More information

John A. Jaeger, CCE Manager Credit & Accounts Receivable Follett Higher Education Group. Extend Credit Management Financial Analyst Investor

John A. Jaeger, CCE Manager Credit & Accounts Receivable Follett Higher Education Group. Extend Credit Management Financial Analyst Investor John A. Jaeger, CCE Manager Credit & Accounts Receivable Follett Higher Education Group Extend Credit Management Financial Analyst Investor Establish the Objectives Study the Industry and Economic Climate

More information

EXERCISES LESSON 3 BALANCE SHEET

EXERCISES LESSON 3 BALANCE SHEET DEPARTAMENTO DE CONTABILIDAD Y ECONOMÍA FINANCIERA ESCUELA UNIVERSITARIA DE ESTUDIOS EMPRESARIALES FINANCIAL ACCOUNTING (DIPLOMATURA EN CIENCIAS EMPRESARIALES, 2º CURSO, GRUPO 5) 2008-2009 EXERCISES LESSON

More information

* * * Chapter 15 Accounting & Financial Statements. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall

* * * Chapter 15 Accounting & Financial Statements. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall Chapter 15 Accounting & Financial Statements Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall Bookkeeping vs. Accounting Bookkeeping Accounting The recording of business transactions.

More information

5 BUSINESS ACCOUNTING STANDARD CASH FLOW STATEMENT I. GENERAL PROVISIONS II. KEY DEFINITIONS

5 BUSINESS ACCOUNTING STANDARD CASH FLOW STATEMENT I. GENERAL PROVISIONS II. KEY DEFINITIONS APPROVED by Resolution No. 1 of 18 December 2003 of the Standards Board of the Public Establishment the Institute of Accounting of the Republic of Lithuania 5 BUSINESS ACCOUNTING STANDARD CASH FLOW STATEMENT

More information

ILLUSTRATION 5-1 BALANCE SHEET CLASSIFICATIONS

ILLUSTRATION 5-1 BALANCE SHEET CLASSIFICATIONS ILLUSTRATION 5-1 BALANCE SHEET CLASSIFICATIONS MAJOR BALANCE SHEET CLASSIFICATIONS ASSETS = LIABILITIES + OWNERS' EQUITY Current Assets Long-Term Investments Current Liabilities Long-Term Debt Capital

More information

Return on Equity has three ratio components. The three ratios that make up Return on Equity are:

Return on Equity has three ratio components. The three ratios that make up Return on Equity are: Evaluating Financial Performance Chapter 1 Return on Equity Why Use Ratios? It has been said that you must measure what you expect to manage and accomplish. Without measurement, you have no reference to

More information

Chapter Review Problems

Chapter Review Problems Chapter Review Problems Unit 17.1 Income statements 1. When revenues exceed expenses, is the result (a) net income or (b) net loss? (a) net income 2. Do income statements reflect profits of a business

More information

Teacher Resource Bank

Teacher Resource Bank Teacher Resource Bank GCE Accounting Other Guidance: ACCN2 Update on IAS ACCN3 Updates on IAS (July 2012). The Assessment and Qualifications Alliance (AQA) is a company limited by guarantee registered

More information

Paper F7. Financial Reporting. Wednesday 3 June 2015. Fundamentals Level Skills Module. The Association of Chartered Certified Accountants

Paper F7. Financial Reporting. Wednesday 3 June 2015. Fundamentals Level Skills Module. The Association of Chartered Certified Accountants Fundamentals Level Skills Module Financial Reporting Wednesday 3 June 2015 Time allowed Reading and planning: 15 minutes Writing: 3 hours This paper is divided into two sections: Section A ALL 20 questions

More information

FSA Note: Summary of Financial Ratio Calculations

FSA Note: Summary of Financial Ratio Calculations FSA Note: Summary of Financial Ratio Calculations This note contains a summary of the more common financial statement ratios. A few points should be noted: Calculations vary in practice; consistency and

More information

CENTRE FOR CONTINUING EDUCATION BBA (AVIATION OPERATION)

CENTRE FOR CONTINUING EDUCATION BBA (AVIATION OPERATION) CENTRE FOR CONTINUING EDUCATION BBA (AVIATION OPERATION) BATCH: SEMESTER: NAME: ROLL NO: ASSIGNMENT 1 & 2 FOR BUSINESS ACCOUNTING BBCF 131 UNIVERSITY OF PETROLEUM & ENERGY STUDIES Assignment-1 Note: All

More information

Engineering Economics 2013/2014 MISE

Engineering Economics 2013/2014 MISE Problem: JS, Inc. shows the following accounting records for 2011: Sales commissions 15000 Beginning merchandise inventory 16000 Ending merchandise inventory 9000 Sales 185000 Advertising 10000 Purchases

More information

FINANCIAL ACCOUNTING WEEK 12 STATEMENT OF CASH FLOWS. A. Understand the basic structure and format of the statement of cash flows.

FINANCIAL ACCOUNTING WEEK 12 STATEMENT OF CASH FLOWS. A. Understand the basic structure and format of the statement of cash flows. FINANCIAL ACCOUNTING WEEK 12 STATEMENT OF CASH FLOWS I. LEARNING OBJECTIVES - STATEMENT OF CASH FLOWS A. Understand the basic structure and format of the statement of cash flows. B. Distinguish cash flows

More information

WORK PROCESS SCHEDULE ACCOUNTING TECHNICIAN O*NET-SOC CODE: 43-3031.00 RAIS CODE: 1125HY

WORK PROCESS SCHEDULE ACCOUNTING TECHNICIAN O*NET-SOC CODE: 43-3031.00 RAIS CODE: 1125HY Accounting Technician 1 WORK PROCESS SCHEDULE ACCOUNTING TECHNICIAN O*NET-SOC CODE: 43-3031.00 RAIS CODE: 1125HY DESCRIPTION: Compute, classify, and record numerical data to keep financial records complete.

More information

2. More important - provide a profile of firm s economic characteristics and competitive strategies.

2. More important - provide a profile of firm s economic characteristics and competitive strategies. RATIO ANALYSIS-OVERVIEW Ratios: 1. Provide a method of standardization 2. More important - provide a profile of firm s economic characteristics and competitive strategies. Although extremely valuable as

More information

Financial Statements and Ratios: Notes

Financial Statements and Ratios: Notes Financial Statements and Ratios: Notes 1. Uses of the income statement for evaluation Investors use the income statement to help judge their return on investment and creditors (lenders) use it to help

More information

Consolidated Financial Results for Fiscal Year 2013 (April 1, 2013 March 31, 2014)

Consolidated Financial Results for Fiscal Year 2013 (April 1, 2013 March 31, 2014) Consolidated Financial Results for Fiscal Year 2013 (April 1, 2013 March 31, 2014) 28/4/2014 Name of registrant: ShinMaywa Industries, Ltd. Stock Exchange Listed: Tokyo Code number: 7224 (URL: http://www.shinmaywa.co.jp

More information

performance of a company?

performance of a company? How to deal with questions on assessing the performance of a company? (Relevant to ATE Paper 7 Advanced Accounting) Dr. M H Ho This article provides guidance for candidates in dealing with examination

More information

I. Consolidated Balance Sheet

I. Consolidated Balance Sheet I. Consolidated Balance Sheet Note At 30 2013 At 31 December ASSETS Non-current assets Property, plant and equipment 3.2 361 738 357 715 Goodwill 3.3 44 061 44 061 Other intangible assets 3.4 82 472 96

More information

ACCOUNTANCY (CLASSES XI-XII)

ACCOUNTANCY (CLASSES XI-XII) ACCOUNTANCY (CLASSES XI-XII) Rationale 136 The course in Accountancy is introduced at + 2 stage of Senior education, as mal commerce education is provided after first ten years of schooling. With the fast

More information

* The official list of textbooks and materials for this course are found on Inside NC.

* The official list of textbooks and materials for this course are found on Inside NC. COURSE SYLLABUS COURSE IDENTIFICATION Course/Prefix Number: ACCT 201 Course Title: Financial Accounting Division: Applied Science Division Program: Accounting Credit Hours: 3 Initiation/Revision Date:

More information

Consolidated and Non-Consolidated Financial Statements

Consolidated and Non-Consolidated Financial Statements May 13, 2016 Consolidated and Non-Consolidated Financial Statements (For the Period from April 1, 2015 to March 31, 2016) 1. Summary of Operating Results (Consolidated) (April 1,

More information

Discussion Board Articles Ratio Analysis

Discussion Board Articles Ratio Analysis Excellence in Financial Management Discussion Board Articles Ratio Analysis Written by: Matt H. Evans, CPA, CMA, CFM All articles can be viewed on the internet at www.exinfm.com/board Ratio Analysis Cash

More information

The following report presents financial data only. The full and binding version is available in Polish. K2 INTERNET S.A.

The following report presents financial data only. The full and binding version is available in Polish. K2 INTERNET S.A. The following report presents financial data only. The full and binding version is available in Polish. K2 INTERNET S.A. Annual Financial Statement of K2 Internet S.A. for the twelve-month period ended

More information

! "#$ %&!& "& ' - 3+4 &*!&-.,,5///2!(.//+ & $!- )!* & % +, -).//0)& 7+00///2 *&&.4 &*!&- 7.00///2 )!*.//+ 8 -!% %& "#$ ) &!&.

! #$ %&!& & ' - 3+4 &*!&-.,,5///2!(.//+ & $!- )!* & % +, -).//0)& 7+00///2 *&&.4 &*!&- 7.00///2 )!*.//+ 8 -!% %& #$ ) &!&. ! "#!""#$%$#$#$"& $'"()*+,$-).,/ 012! "#$ %&!& "& '!(&)!*&%+,-).//0 -#$#3-4' &,'1$1# $!-!(.//0)& +01+///2 *&& - 3+4 &*!&-.,,5///2!(.//+ &!(!-6%(!(.//.$(!(.//0)& 01,///2 //+2% &*!&- 5,0///2 //32%!(.//+

More information

HOME PRODUCT CENTER PUBLIC COMPANY LIMITED BALANCE SHEETS AS AT DECEMBER 31, 2003 AND 2002

HOME PRODUCT CENTER PUBLIC COMPANY LIMITED BALANCE SHEETS AS AT DECEMBER 31, 2003 AND 2002 BALANCE SHEETS AS AT DECEMBER 31, 2003 AND 2002 Assets Note 2003 Baht 2002 Current assets Cash and cash equivalents 2 36,291,871.62 84,051,092.97 Accounts receivable - net 3 121,235,696.40 140,699,262.83

More information

FINANCIAL ACCOUNTING TOPIC: FINANCIAL ANALYSIS

FINANCIAL ACCOUNTING TOPIC: FINANCIAL ANALYSIS SYLLABUS Compulsory part Basic ratio analysis 1. State the general functions of accounting ratios. 2. Calculate and interpret the following ratios: a. working capital/current ratio, quick/liquid/acid test

More information

Appendix. Selected Financial Ratios Useful in Analytical Procedures

Appendix. Selected Financial Ratios Useful in Analytical Procedures Selected Financial Ratios Useful in Analytical Procedures < Appendix D A number of financial ratios are used by auditors as analytical procedures. These ratios are broken down into four categories: short-term

More information

E2-2: Identifying Financing, Investing and Operating Transactions?

E2-2: Identifying Financing, Investing and Operating Transactions? E2-2: Identifying Financing, Investing and Operating Transactions? Listed below are eight transactions. In each case, identify whether the transaction is an example of financing, investing or operating

More information

A Simple Model. The Accounting Equation

A Simple Model. The Accounting Equation An introduction to the accounting equation in the context of building a financial model. This series introduces the financial statements in the context of a financial model. NOTES TO ACCOMPANY VIDEOS These

More information

Financial Results. siemens.com

Financial Results. siemens.com s Financial Results Fourth Quarter and Fiscal 2015 siemens.com Key figures (in millions of, except where otherwise stated) Volume Q4 % Change Fiscal Year % Change FY 2015 FY 2014 Actual Comp. 1 2015 2014

More information

Financial Management Practices

Financial Management Practices RK. Jain Shveta Singh Surendra Singh Yadav Financial Management Practices An Empirical Study of Indian Corporates QA Springer Part I Background 1 Introduction 3 Objectives 4 Rationale 5 Research Methodology

More information

Annual Report Project

Annual Report Project Annual Report Project Nancy A. Herring, PhD, 1 Annual Report Project Dear Student The Annual Report Project (ARP) provides you the opportunity to analyze a corporate annual report. You will obtain the

More information

Guidance on Accounting Elements

Guidance on Accounting Elements Guidance on Accounting Elements OCR GCE in Business Studies August 2012 The following guidance has been prepared in order to assist centres in the preparation of their candidates for the accounting elements

More information

3 BUSINESS ACCOUNTING STANDARD,,INCOME STATEMENT I. GENERAL PROVISIONS

3 BUSINESS ACCOUNTING STANDARD,,INCOME STATEMENT I. GENERAL PROVISIONS APPROVED by Resolution No. 1 of 18 December 2003 of the Standards Board of the Public Establishment the Institute of Accounting of the Republic of Lithuania 3 BUSINESS ACCOUNTING STANDARD,,INCOME STATEMENT

More information

TOPIC LEARNING OBJECTIVE

TOPIC LEARNING OBJECTIVE Topic Mapping 1 Transaction Analysis Understand the effect of various types of transactions on the accounting equation, accounting journal and accounting ledger. Concepts and Skills Accounting Equation

More information

Chapter 3 Analyzing Financial Statement

Chapter 3 Analyzing Financial Statement Chapter 3 Analyzing Financial Statement Five major areas to analyze. (1) Liquidity Position (2) Management of Assets (3) Management of Debt (4) Company's Profitability (5) Market's View of Company (1)

More information

Financial Formulas. 5/2000 Chapter 3 Financial Formulas i

Financial Formulas. 5/2000 Chapter 3 Financial Formulas i Financial Formulas 3 Financial Formulas i In this chapter 1 Formulas Used in Financial Calculations 1 Statements of Changes in Financial Position (Total $) 1 Cash Flow ($ millions) 1 Statements of Changes

More information

Ratio Calculator. Program

Ratio Calculator. Program Ratio Calculator Program This program allows the user to enter the minimum data needed to calculate key financial performance ratios. The program calculates specific ratios and identifies strengths or

More information

Computing Liquidity Ratios Current Ratio = CA / CL 708 / 540 = 1.31 times Quick Ratio = (CA Inventory) / CL (708 422) / 540 =.53 times Cash Ratio =

Computing Liquidity Ratios Current Ratio = CA / CL 708 / 540 = 1.31 times Quick Ratio = (CA Inventory) / CL (708 422) / 540 =.53 times Cash Ratio = 1 Computing Liquidity Ratios Current Ratio = CA / CL 708 / 540 = 1.31 times Quick Ratio = (CA Inventory) / CL (708 422) / 540 =.53 times Cash Ratio = Cash / CL 98 / 540 =.18 times 2 Computing Leverage

More information

Consolidated Statement of Profit or Loss (in million Euro)

Consolidated Statement of Profit or Loss (in million Euro) Consolidated Statement of Profit or Loss (in million Euro) Q3 2013 Q3 2014 % change 9m 2013 9m 2014 % change Revenue 689 636-7.7% 2,126 1,909-10.2% Cost of sales (497) (440) -11.5% (1,520) (1,324) -12.9%

More information

Supplementary Notes 13/14 for Trimmed BAFS Curriculum

Supplementary Notes 13/14 for Trimmed BAFS Curriculum Supplementary Notes 13/14 for Trimmed BAFS Curriculum (To be implemented in S4 in 2013/14; effective for 2016 HKDSE and onwards) Appendices: 1. Formulae of Ratios 2. Accounting Terminology Compulsory Part

More information

Institute of Certified Bookkeepers

Institute of Certified Bookkeepers Making you count Institute of Certified Bookkeepers Level IV Module 2 Drafting Financial Statements Topic 1 The Regulatory Framework Explain the purpose of Financial Statements, the legal framework that

More information

6. Financial Planning. Break-even. Operating and Financial Leverage.

6. Financial Planning. Break-even. Operating and Financial Leverage. 6. Financial Planning. Break-even. Operating and Financial Leverage. Financial planning primarily involves anticipating the impact of operating, investment and financial decisions on the firm s future

More information

Mc Graw Hill Education

Mc Graw Hill Education Fundamentals of FINANCIAL ACCOUNTING Fifth Edition FRED PHILLIPS University of Saskatchewan ROBERT LIBBY Cornell University PATRICIA A. LIBBY Ithaca College Mc Graw Hill Education CHARTER 1 Business Decisions

More information

APPENDIX 1 The Statement of Financial Position

APPENDIX 1 The Statement of Financial Position APPENDIX 1 The Statement of Financial Position 1. Assets: the resources of the organization which are used to provide service and generate value 2. Current assets: assets which can be converted to cash

More information

CONSOLIDATED INCOME STATEMENTS

CONSOLIDATED INCOME STATEMENTS ATTACHMENTS TO THE PRESS RELEASE The consolidated Income Statements, consolidated Statements of Financial Position and the Consolidated Statements of Cash Flows as well as the Net Financial Debt of INWIT,

More information

The following report presents financial data only. The full and binding version is available in Polish. K2 INTERNET S.A.

The following report presents financial data only. The full and binding version is available in Polish. K2 INTERNET S.A. The following report presents financial data only. The full and binding version is available in Polish. K2 INTERNET S.A. Annual Financial Statement of K2 Internet S.A. for the twelve-month period ended

More information

HSC BUSINESS STUDIES

HSC BUSINESS STUDIES 1 YEAR 12 HSC BUSINESS STUDIES ASSESSMENT TASK 2 FINANCE TIME ALLOWED 75 minutes This task is divided into TWO sections as follows: Section I: Multiple Choice Questions 15 marks.. Section II: Short Answer

More information

Course 1: Evaluating Financial Performance

Course 1: Evaluating Financial Performance Excellence in Financial Management Course 1: Evaluating Financial Performance Prepared by: Matt H. Evans, CPA, CMA, CFM This course provides a basic understanding of how to use ratio analysis for evaluating

More information

Cork Institute of Technology. Autumn 2006 Advanced Financial Accounting (Time: 3 Hours)

Cork Institute of Technology. Autumn 2006 Advanced Financial Accounting (Time: 3 Hours) Cork Institute of Technology Bachelor of Business in Accounting Award Bachelor of Business in Management - Award Instructions Answer FOUR questions Answer all THREE questions in Section A and ONE question

More information

Learning Objectives: Quick answer key: Question # Multiple Choice True/False. 14.1 Describe the important of accounting and financial information.

Learning Objectives: Quick answer key: Question # Multiple Choice True/False. 14.1 Describe the important of accounting and financial information. 0 Learning Objectives: 14.1 Describe the important of accounting and financial information. 14.2 Differentiate between managerial and financial accounting. 14.3 Identify the six steps of the accounting

More information

Accounting Principles Critical to Success Presented By: C. P. Krishnan. www.cakintl.com

Accounting Principles Critical to Success Presented By: C. P. Krishnan. www.cakintl.com Accounting Principles Critical to Success Presented By: C. P. Krishnan Basic Accounting You Need to Know Assets, Liabilities, Equity, Income, & Expenses Assets Includes what you have and what people owe

More information

Strides Pharma Botswana (Pty) Ltd BALANCE SHEET AS AT Mar 31, 2016

Strides Pharma Botswana (Pty) Ltd BALANCE SHEET AS AT Mar 31, 2016 BALANCE SHEET AS AT Mar 31, 2016 Schedule A. EQUITY AND LIABILITIES 1. Shareholders' funds a) Share capital 1 1,597,444 1,597,444 b) Reserves and Surplus 2 1,737,474-3,334,918 1,597,444 2. Share application

More information

Audited (Restated) (*)

Audited (Restated) (*) 31 December 2015 31 December 2014 31 December 2013 ASSETS Current assets 459.875.342 251.625.938 233.029.758 Cash and cash equivalents 5 123.908.125 123.909.277 101.043.123 Financial investments 6 -- 15.126.664

More information

This exam paper is in two sections. You should try to complete every task in both sections.

This exam paper is in two sections. You should try to complete every task in both sections. Exam question paper NVQ/SVQ Level 4 in Accounting Drafting Financial Statements (Accounting Practice, Industry and Commerce) (DFS) 2003 Standards Diploma in Accounting (Diploma Pathway) Drafting Financial

More information

Fundamental analysis

Fundamental analysis Fundamental analysis 2 June 2016 CERN Finance Club c.laner@cern.ch Introduction Let s cover the two main types of investment analysis used in traditional investing Today: Fundamental analysis Next time:

More information

Teacher Resource Bank

Teacher Resource Bank Teacher Resource Bank GCE Accounting Other Guidance: Layouts and Formulae ACCN1: Layouts ACCN2: Layouts and Formulae ACCN4: Layouts and Formulae (Updated July 2012) The Assessment and Qualifications Alliance

More information

Schneps, Leila; Colmez, Coralie. Math on Trial : How Numbers Get Used and Abused in the Courtroom. New York, NY, USA: Basic Books, 2013. p i.

Schneps, Leila; Colmez, Coralie. Math on Trial : How Numbers Get Used and Abused in the Courtroom. New York, NY, USA: Basic Books, 2013. p i. New York, NY, USA: Basic Books, 2013. p i. http://site.ebrary.com/lib/mcgill/doc?id=10665296&ppg=2 New York, NY, USA: Basic Books, 2013. p ii. http://site.ebrary.com/lib/mcgill/doc?id=10665296&ppg=3 New

More information

Consolidated Statement of Profit or Loss (in million Euro)

Consolidated Statement of Profit or Loss (in million Euro) Consolidated Statement of Profit or Loss (in million Euro) Q3 2014 Q3 2015 % change 9m 2014 9m 2015 % change Revenue 636 661 3.9% 1,909 1,974 3.4% Cost of sales (440) (453) 3.0% (1,324) (1,340) 1.2% Gross

More information

Financial Statement and Cash Flow Analysis

Financial Statement and Cash Flow Analysis Chapter 2 Financial Statement and Cash Flow Analysis Answers to Concept Review Questions 1. What role do the FASB and SEC play with regard to GAAP? The FASB is a nongovernmental, professional standards

More information

NEPAL ACCOUNTING STANDARDS ON CASH FLOW STATEMENTS

NEPAL ACCOUNTING STANDARDS ON CASH FLOW STATEMENTS NAS 03 NEPAL ACCOUNTING STANDARDS ON CASH FLOW STATEMENTS CONTENTS Paragraphs OBJECTIVE SCOPE 1-3 BENEFITS OF CASH FLOWS INFORMATION 4-5 DEFINITIONS 6-9 Cash and cash equivalents 7-9 PRESENTATION OF A

More information

Business Ratios and Formulas. A Comprehensive Guide. 3rd Edition. Wiley Corporate F&A

Business Ratios and Formulas. A Comprehensive Guide. 3rd Edition. Wiley Corporate F&A Brochure More information from http://www.researchandmarkets.com/reports/2213049/ Business Ratios and Formulas. A Comprehensive Guide. 3rd Edition. Wiley Corporate F&A Description: A complete appraisal

More information

SUGGESTED LAYOUTS FOR FINANCIAL STATEMENTS

SUGGESTED LAYOUTS FOR FINANCIAL STATEMENTS Appendix 2 SUGGESTED LAYOUTS FOR FINANCIAL STATEMENTS These layouts are suggestions only and are not prescriptive. Other suitable alternatives which conform to the general principles of FRS 102 will be

More information

Preparing a Successful Financial Plan

Preparing a Successful Financial Plan Topic 9 Preparing a Successful Financial Plan LEARNING OUTCOMES By the end of this topic, you should be able to: 1. Describe the overview of accounting methods; 2. Prepare the three major financial statements

More information

Credit Analysis 10-1

Credit Analysis 10-1 Credit Analysis 10-1 10-2 Liquidity and Working Capital Basics Liquidity - Ability to convert assets into cash or to obtain cash to meet short-term obligations. Short-term - Conventionally viewed as a

More information

Using Accounts to Interpret Performance

Using Accounts to Interpret Performance Using s to Interpret Performance ing information is used by stakeholders to judge the performance and efficiency of a business Different stakeholders will look for different things: STAKEHOLDER Shareholders

More information

CHAPTER 4 The Mechanics of Financial Accounting

CHAPTER 4 The Mechanics of Financial Accounting CHAPTER 4 The Mechanics of Financial Accounting SYNOPSIS This chapter covers the mechanics underlying preparation of financial statements and how they help to ensure that a company s transactions are accurately

More information

Chapter 9 Solutions to Problems

Chapter 9 Solutions to Problems Chapter 9 Solutions to Problems 1. a. Cash and cash equivalents are cash in hand and in banks, plus money market securities with maturities of 90 days or less. Accounts receivable are claims on customers

More information

ASX Announcement 29 August 2014 PRELIMINARY FINAL REPORT

ASX Announcement 29 August 2014 PRELIMINARY FINAL REPORT ABN 68 009 161 522 ASX Announcement 29 August 2014 PRELIMINARY FINAL REPORT SubZero Group Limited (ASX: SZG) submits its Appendix 4E preliminary financial report for the year ended 30 June 2014. For further

More information

Current Assets. Current Liabilities. Quick Assets or Liquid Assets. Current Liabilities. 1. Liquidity Ratios 1 Current Ratio Formula.

Current Assets. Current Liabilities. Quick Assets or Liquid Assets. Current Liabilities. 1. Liquidity Ratios 1 Current Ratio Formula. 1. Liquidity Ratios 1 Current Ratio Current Assets Current Liabilities This ratio shows short-term financial soundness of the business. Higher ratio means better capacity to meet its current obligation.

More information

Finance Master. Winter 2015/16. Jprof. Narly Dwarkasing University of Bonn, IFS

Finance Master. Winter 2015/16. Jprof. Narly Dwarkasing University of Bonn, IFS Finance Master Winter 2015/16 Jprof. Narly Dwarkasing University of Bonn, IFS Chapter 2 Outline 2.1 Firms Disclosure of Financial Information 2.2 The Balance Sheet 2.3 The Income Statement 2.4 The Statement

More information

I. GENERAL PROVISIONS II. KEY DEFINITIONS

I. GENERAL PROVISIONS II. KEY DEFINITIONS APPROVED by Resolution No. 1 of 18 December 2003 of the Standards Board of the Public Establishment the Institute of Accounting of the Republic of Lithuania (Revised version of Order No. VAS-5 of 29 June

More information

CONSOLIDATED STATEMENT OF INCOME

CONSOLIDATED STATEMENT OF INCOME CONSOLIDATED STATEMENT OF INCOME 4 th quarter (a) 3 rd quarter 4 th quarter 2009 Sales 40,157 40,180 36,228 Excise taxes (4,397) (4,952) (4,933) Revenues from sales 35,760 35,228 31,295 Purchases, net

More information

Chapters 3 and 13 Financial Statement and Cash Flow Analysis

Chapters 3 and 13 Financial Statement and Cash Flow Analysis Chapters 3 and 13 Financial Statement and Cash Flow Analysis Balance Sheet Assets Cash Inventory Accounts Receivable Property Plant Equipment Total Assets Liabilities and Shareholder s Equity Accounts

More information

Chapter-3 C FINANCIAL RATIO ANALYSIS. BSNL, India For Internal Circulation Only 1

Chapter-3 C FINANCIAL RATIO ANALYSIS. BSNL, India For Internal Circulation Only 1 Chapter-3 C FINANCIAL RATIO ANALYSIS BSNL, India For Internal Circulation Only 1 RATIO ANALYSIS FINANCIAL ANALYSIS is the process of identifying the financial strengths and weakness of the firm by properly

More information

Preliminary Consolidated Financial Statements 2015 >

Preliminary Consolidated Financial Statements 2015 > Preliminary Consolidated Financial Statements 2015 > The following results and amounts are preliminary statements that have not yet been approved or adopted by the Supervisory Board. Preliminary Consolidated

More information

FINANCIAL STATEMENTS OF KDD CENTRAL SECURITIES CLEARING CORPORATION (KDD)

FINANCIAL STATEMENTS OF KDD CENTRAL SECURITIES CLEARING CORPORATION (KDD) FINANCIAL STATEMENTS OF KDD CENTRAL SECURITIES CLEARING CORPORATION (KDD) for the year ended December 31, 2013 (abbreviated) Ljubljana, February 2014 Boris Tomaž Šnuderl President and CEO Davor Pavić Deputy

More information

Financial Condition Analysis Model

Financial Condition Analysis Model Financial Condition Analysis Model GOVERNMENTAL ACTIVITIES & ENTERPRISE FUNDS Economic resources and accrual basis of accounting Flow Financial Dimension Financial Indicator Interpretation Interperiod

More information

ACCOUNTING CONVENTIONS AND STANDARDS

ACCOUNTING CONVENTIONS AND STANDARDS 3 ACCOUNTING CONVENTIONS AND STANDARDS In the previous lesson, you have studied the accounting concepts like business entity, money measurement, going concern, accounting period, cost, duality, realisation,

More information

Consolidated Balance Sheets

Consolidated Balance Sheets Consolidated Balance Sheets March 31 2015 2014 2015 Assets: Current assets Cash and cash equivalents 726,888 604,571 $ 6,057,400 Marketable securities 19,033 16,635 158,608 Notes and accounts receivable:

More information

3 Financial Analysis and Planning

3 Financial Analysis and Planning 3 Financial Analysis and Planning BASIC CONCEPTS AND FORMULAE 1. Financial Analysis and Planning Financial Analysis and Planning is carried out for the purpose of obtaining material and relevant information

More information

Ratio Analysis CBDC, NB. Presented by ACSBE. February, 2008. Copyright 2007 ACSBE. All Rights Reserved.

Ratio Analysis CBDC, NB. Presented by ACSBE. February, 2008. Copyright 2007 ACSBE. All Rights Reserved. Ratio Analysis CBDC, NB February, 2008 Presented by ACSBE Financial Analysis What is Financial Analysis? What Can Financial Ratios Tell? 7 Categories of Financial Ratios Significance of Using Ratios Industry

More information

Understanding Financial Information for Bankruptcy Lawyers Understanding Financial Statements

Understanding Financial Information for Bankruptcy Lawyers Understanding Financial Statements Understanding Financial Information for Bankruptcy Lawyers Understanding Financial Statements In the United States, businesses generally present financial information in the form of financial statements

More information