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Accounting Analysis

Learn about Income Statement, Balance Sheet, Cash Flow Statement, and essential financial ratios to evaluate company performance effectively. Gain insights into the nuances of financial reporting and analysis.

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Accounting Analysis

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  1. Accounting Analysis James Godrich 22/11/2018

  2. What Will I Learn? • Income Statement • Balance Sheet • Cash Flow Statement • Naughties

  3. Cost of Goods Sold: ‘is the direct costs attributable to the production of the goods sold in a company. This amount includes the cost of the materials used in creating the good along with the direct labour costs used to produce the good. It excludes indirect expenses such as distribution costs and sales force costs.’ Source: Investopedia Gross Profit

  4. Selling, General & Administrative Expense: ‘is reported on the income statement as the sum of all direct and indirect selling expenses and all general and administrative expenses (G&A) of a company. It includes all the costs not directly tied to making a product or performing a service.’ Source: Investopedia Operating Profit

  5. Net Income

  6. Income Statement

  7. Balance Sheet

  8. Current Assets Non Current Assets = Current Liabilities Non Current Liabilities + Share Capital Retained Earnings Balance Sheet

  9. Balance Sheet

  10. Cash Flow Statement CFO – cash flow from day-to-day operations CFI – cash flow from investment or disposal in assets CFF – cash flow from company financing

  11. Cash Flow Statement

  12. What do we like?

  13. And how do we measure it? FCFF = CFO + Int(1-tax rate) - Capex

  14. Berendsen

  15. Off BS Gearing (pension & leases) – are they hiding debt where I might not normally look? • Working Capital movements – is there any reason to be suspicious about WC? • Capex – has the asset base been underinvested? • Exceptionals – are exceptionals truly exceptional? Naughties

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