1 / 24

Accounting Week 48: Financial Statements, Cash Flow Statement, and Financial Indicators

Learn about financial statements, cash flow statements, and how to analyze a company's performance using financial indicators. Includes tutorials and practice problems.

essieg
Download Presentation

Accounting Week 48: Financial Statements, Cash Flow Statement, and Financial Indicators

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Accounting 2016-2017P 6011P0148 / PE 6011P0150 Tutorials week 48 Amsterdam Business School

  2. So far…. • Financial statements and relationship between them • Recording economic transactions (journal entry method) • Understanding account types • Getting familiar with economic transactions related to the balance sheet (assets, liabilities and owner’s equity) Accounting Week 48

  3. Today • Understanding the structure of the income statement • Understanding the goal and structure of the cash flow statement • Prepare a cash flow statement with the direct and indirect method • Using indicators based on information from financial statements to analyze the performance of a company • Rounding up the financial accounting part of the course Accounting Week 48

  4. Contents • CH9:P 9.20, P9.24, P9.26, • CH3: P3.19, C3.24 • CH11: P11.14 • Summary Accounting Week 48

  5. P9.20 (page 348) • We practice the structure of the income statement • We get familiar with the income related to various activities • We learn how the net income (which goes to retained earnings at the end of the year and also the first item in an indirect cash-flow statement) is calculated Accounting Week 48

  6. Accounting Week 48

  7. Accounting Week 48

  8. Accounting Week 48

  9. Cash-flow statement • Methods • Direct (P9.26) • Indirect (P9.23) • Structure The main structure (three parts) is the same for both methods, the approach to calculate those items are different Accounting Week 48

  10. How to prepare a cash-flow statement with the direct method? • Record all the economic transactions • Select those transactions which involve the “Cash” account • Identify where the transactions related to changes in “cash” go in the cash-flow statement Accounting Week 48

  11. Direct Method Accounting Week 48

  12. Accounting Week 48

  13. Indirect method (P9.24 page 349-50) Accounting Week 48

  14. Accounting Week 48

  15. Financial indicators C3.24 • Practicing calculating Accounting Week 48

  16. Accounting Week 48

  17. Accounting Week 48

  18. Accounting Week 48

  19. Accounting Week 48

  20. Accounting Week 48

  21. 3. Price/earnings ratio = ($41.96 market value per common share / $2.59 diluted earnings per common share outstanding) = 16.2 4. Dividend yield = ($1.248 dividends declared per share / $41.96 market value per common share) = 3.0% 5. Dividend payout ratio = ($1.248 dividends per common share / $2.59 diluted earnings per common share outstanding) = 48.2% Accounting Week 48

  22. Accounting Week 48

  23. Accounting Week 48

  24. Accounting Week 48

More Related