Anglicky v odborných předmětech "Support of teaching technical subjects in English “

1. Anglicky v odborných předmětech"Support ofteachingtechnicalsubjects in English“ Tutorial: Business Academy Topic: Financial business analysis Prepared by: Ing. Marcela Zlatníková Projekt Anglicky v odborných předmětech, CZ.1.07/1.3.09/04.0002 je spolufinancován Evropským sociálním fondem a státním rozpočtem České republiky.

2. Theimportanceoffinancialanalysis • Financial analysis measures the data from financial statements mutually • The aim is to express a complex financial situation of a business • The analysis shows not only the past development, but also helps to choose the most appropriate directions of further development of the business • Users of the financial analysis are namely: managers (business administrators), investors (shareholders, partners), banks and other creditors, the state and its institutions, customers, suppliers, employees

3. Financialstatements • The data recorded in theaccounting are summarizedwhenbalancingbooksintofinancialstatements: * balance sheet * profit andlossstatement (income) * annexe Financialstatementsmaybeextendedfor a summaryoffinancialflows (cash flow) andfor a summaryofchanges in equity. Financialstatementsmaybe: ∙ scheduled (31.12.) ∙ non-scheduled (e.g. atthedateofstuttingdownthecompanywithoutliquidation) ∙ interim ( duringtheaccounting period, e.g. changinglegalform)

4. Somebusinesses are obliged to verifythefinancialstatements by auditor. These are largecompanies, activitiesofwhichsignificantly influence nationaleconomy. These include: ∎joinstockcompanies, iftheyachievedatleastonecriterion ∎othercompaniesandcooperatives, iftheyachieved in theaccounting period atleasttwoofthreecriteria: 1/ Theassets are more than 40 millioncrowns 2/ Net turnoveris more than 80 millioncrowns 3/ Re-countednumberofemployeesis more than 50

5. AUDIT – is a process in which a charged person (auditor) examinestheinformationcontained in thefinancialstatements, he orsheevaluatesthedocuments to formfinancialstatementsandexpresses his or her opinion on thequalityoffinancialstatements. Businesseswhich are obliged to audit, attach to thefinancialstatementstheannual report. Financialstatementsmaybedrawnup: √ in fullrange ( businessessubjected to audit) √ in simplifiedrange ( otherbusinesses)

6. Balance sheet • It contains information about the state and structure of property (assets) and sources of financing out of which the property was acquired (liabilities) at a specific point of time • In the balance sheet there are three types of figures expressed in crowns: • GROSS (rough state) – there is recorded property in prices current in time of its acquisition • CORRECTION – deducted from gross state , e.g. adjustments of value, correction items • NET – it is differential value of preceding items ASSETS are divided into: receivables for assigned personal capital, fixed assets, current assets, other assets LIABILITIES are divided into: personal funds, other funds, remaining funds

7. Profit andlossstatement (income) • Itcontains data aboutcosts, revenuesandtheresultsofeconomyforthecurrentandpreviousaccounting period • Revenuesandexpenses are divided in order to findoutcommercialmargin, theresultofmanufacturingactivityaddedvaluesizeandindividualcomponentsofeconomicalresults • Thestatementisorganized in steps • Commercialmarginandaddedvalue are differentialitemsthathaveeconomicimportance

8. Annexe • Itexplainsandcompletesthe data in the balance sheetand profit andlossstatement • Itsformischosen by thefirmitselfanditmaybe a table oritmayhavedescriptiveform • Itnamelycontainsinformationaboutusedaccountingmethods, changescompared to previousaccountedperiods in theorganizationandmarkingitems in the balance sheetand profit andlossaccountanddescriptionoftheusedvaluationofstock

9. Cash-flowoverview • Itis a statementoftheflowquantities • Cash flows are increasesanddecreasesof cash resourcesand cash equivalents • Cash flows are monitored in divisionintooperating, investingandfinancialactivity • Themainproblemis to transformcostandrevenueitemsinto cash flowform • Directandindirectmethodisused

10. Tasks: 1/ Distinguish personal and other funds of a business 2/ Name some components of current assets of the company 3/Explain why the balance equation - that assets must equal liabilities - should be valid 4/ Which side of the balance sheet includes the achieved profit of the company and why?

11. Bibliography: • Biňovec, K. Přehled učiva k maturitní zkoušce z ekonomiky. Fortuna, 2004. ISBN 80-7168-747-2. • Švarcová Jena, ing a kolektiv, Ekonomie, stručný přehled. Ing. Jena Švarcová, Ph.D., CEED nakladatelství a vydavatelství, 2006. ISBN 80-903433-3-3. • Klínský Petr, Munch Otto, Ekonomika pro obchodní akademie a ostatní střední školy 1-4.Fortuna, 2003, ISBN 80-7168-862-2.