Lesson 2

55問 • 5ヶ月前

問題一覧

These are formal records of the financial activities and position of a business, person, or other entity.

Financial Statements

They provide crucial information to various stakeholders-owners, managers, investors, creditors, and regulators-helping them make informed economic decisions.

Financial Statements

It is the presentation of data in the company assets, liabilities, and equities.

Financial Statements

Financial managers use this statement in financing and investing funds.

Financial Statements

It greatly affects in formulating dividend policy decisions.

Financial Statements

They are primarily concerned with the standing of the company.

Financial Statements

Managers should use the financial statement as vital information on the company’s performance from the previous and future information.

Financial Statements

Basic Financial Statements

Balance Sheet (Statement of Financial Position), Income Statement, Statement of Cash Flows, Statement of Changes in Equity, Notes to Financial Statements

provides a snapshot of a company’s financial position at a specific point in time.

Balance Sheet

It shows what the company owns (assets), what it owes (liabilities), and the residual interest of the owners (shareholders’ equity).

Balance Sheet

The fundamental accounting equation is:

Assets = Liabilities + Shareholders' Equity

It include current assets (cash, inventory, accounts receivable) and fixed/non-current assets (property, plant, equipment, intangible assets like patents and goodwill).

Asset

These are obligations the company must pay, divided into current liabilities (due within one year) and long-term liabilities (due after one year).

Liabilities

represents the owners’ claim after liabilities are settled.

Shareholders' Equity

It is the sum of the net worth of the residual value of the company

Shareholders' Equity

This statement summarizes revenues, expenses, and profits or losses over a period, showing the company’s operational performance.

Income Statement

Income from primary business activities (sales) and secondary sources(interest, asset sales)

Revenue

Costs incurred to generate revenue, including cost of goods sold (COGS)and operating expenses.

Expenses

direct cost attributed to manufacturing the products sold by the firm

Cost of Goods Sold

correspond to overhead expenses, salaries, advertising and other operating costs not directly attributable to production.

General and Administrative Expenses

It reveals profitability and operational efficiency, guiding pricing, cost control, and growth decisions.

Net Income

It is the difference between the Revenue and Expenses. It is net income if there is profit remaining after all expenses, taxes, and costs are deducted.

Net Income

The expenses, taxes and costs are greater than the income.

Net Loss

accumulated income or loss of the company

Retained Earnings

the declaration for the year that is indicated as a deduction form retained earnings.

Declaration of Dividends

includes unrealized gains and losses on financial assets at FVOCI and foreign currency translation adjustments.

Accumulated Other Comprehensive Income

a required basic statement that shows the movements of the component of equity.

Statement of Changes in Equity

The cash flow statement tracks the movement of cash and cash equivalents during the period, categorized into:

Operating Activities, Investing Activities, Financing Activities

Cash generated or used in core business operations

Operating Activities

Cash used for or generated from buying/selling assets.

Investing Activities

Cash flows from borrowing, repaying debt, issuing stock, or paying dividends.

Financing Activities

This statement is critical for understanding liquidity and the company’s ability to generate cash to meet obligations

Financing Activities

generates concise information on how the company generated and use its cash during the period.

Statement of Cash Flows

The analysis of this statement is needed in appraising the past performance, forecasting cash usage and evaluating the firm’s ability to satisfy its debts at maturity.

Statement of Cash Flows

the comparison of one firm of the past and present activities of the firm and forecast in the future.

Financial Statement Analysis

It permit comparisons over time and among companies, highlighting similarities, differences, and trends.

Ratios

Proficiency with common financial statement analysis techniques benefits both internal and external users.

Ratios

Steps in Financial Statement Analysis

Understand the Financial Statements, Collect Relevant Data, Perform Ratio and Other Analysis, Interpret the Results, Develop Conclusions and Recommendations, Follow-up and Continuous Monitoring

Gain in-depth knowledge of the income statement, balance sheet, and cash flow statement, including their components and interrelationships.

Understand the Financial Statements

Gather financial statements for multiple periods and, if possible, for peer companies or industry benchmarks.

Collect Relevant Data

Calculate key financial ratios and conduct horizontal and vertical analyses to identify trends, proportions, and relationships.

Perform Ratio and Other Analysis

Analyze the computed metrics in the context of industry norms, company strategy, and economic conditions.

Interpret the Results

Formulate insights regarding the company’s financial health, investment potential, creditworthiness, or operational efficiency

Develop Conclusions and Recommendations

Periodically update the analysis to track changes and adjust recommendations as necessary

Follow-up and Continuous Monitoring

Common Techniques Used in Financial Statement Analysis

Horizontal Analysis, Vertical Analysis

Compares financial data across multiple periods to identify trends and growth patterns.

Horizontal Analysis

It calculates percentage changes in line items year-over-year to detect increases or decreases in revenues, expenses, assets, or liabilities.

Horizontal Analysis

uses a significant item in the financial statement as base value

Vertical Analysis

each account in the financial statement is expressed by dividing them into a common base account (total assets, liabilities, equity, sales or net sales.

Common Size Statement

involves calculating financial ratios that measure: Profitability, Liquidity, Leverage or Solvency, Asset Utilization or Activity

Financial Ratio/Ratio Analysis

shows the earnings of the operation of the company; highlights the firm’s effectiveness in handling its operations

Profitability

shows the firm’s ability to meet its maturing short-term obligations.

Liquidity

ability to meet long-term obligations as they become due

Leverage or Solvency

shows how quickly various accounts are converted to sales of cash

Asset Utilization or Activity

Shows the firm’s stock price

Market Value

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問題一覧

These are formal records of the financial activities and position of a business, person, or other entity.

Financial Statements

They provide crucial information to various stakeholders-owners, managers, investors, creditors, and regulators-helping them make informed economic decisions.

Financial Statements

It is the presentation of data in the company assets, liabilities, and equities.

Financial Statements

Financial managers use this statement in financing and investing funds.

Financial Statements

It greatly affects in formulating dividend policy decisions.

Financial Statements

They are primarily concerned with the standing of the company.

Financial Statements

Managers should use the financial statement as vital information on the company’s performance from the previous and future information.

Financial Statements

Basic Financial Statements

Balance Sheet (Statement of Financial Position), Income Statement, Statement of Cash Flows, Statement of Changes in Equity, Notes to Financial Statements

provides a snapshot of a company’s financial position at a specific point in time.

Balance Sheet

It shows what the company owns (assets), what it owes (liabilities), and the residual interest of the owners (shareholders’ equity).

Balance Sheet

The fundamental accounting equation is:

Assets = Liabilities + Shareholders' Equity

It include current assets (cash, inventory, accounts receivable) and fixed/non-current assets (property, plant, equipment, intangible assets like patents and goodwill).

Asset

These are obligations the company must pay, divided into current liabilities (due within one year) and long-term liabilities (due after one year).

Liabilities

represents the owners’ claim after liabilities are settled.

Shareholders' Equity

It is the sum of the net worth of the residual value of the company

Shareholders' Equity

This statement summarizes revenues, expenses, and profits or losses over a period, showing the company’s operational performance.

Income Statement

Income from primary business activities (sales) and secondary sources(interest, asset sales)

Revenue

Costs incurred to generate revenue, including cost of goods sold (COGS)and operating expenses.

Expenses

direct cost attributed to manufacturing the products sold by the firm

Cost of Goods Sold

correspond to overhead expenses, salaries, advertising and other operating costs not directly attributable to production.

General and Administrative Expenses

It reveals profitability and operational efficiency, guiding pricing, cost control, and growth decisions.

Net Income

It is the difference between the Revenue and Expenses. It is net income if there is profit remaining after all expenses, taxes, and costs are deducted.

Net Income

The expenses, taxes and costs are greater than the income.

Net Loss

accumulated income or loss of the company

Retained Earnings

the declaration for the year that is indicated as a deduction form retained earnings.

Declaration of Dividends

includes unrealized gains and losses on financial assets at FVOCI and foreign currency translation adjustments.

Accumulated Other Comprehensive Income

a required basic statement that shows the movements of the component of equity.

Statement of Changes in Equity

The cash flow statement tracks the movement of cash and cash equivalents during the period, categorized into:

Operating Activities, Investing Activities, Financing Activities

Cash generated or used in core business operations

Operating Activities

Cash used for or generated from buying/selling assets.

Investing Activities

Cash flows from borrowing, repaying debt, issuing stock, or paying dividends.

Financing Activities

This statement is critical for understanding liquidity and the company’s ability to generate cash to meet obligations

Financing Activities

generates concise information on how the company generated and use its cash during the period.

Statement of Cash Flows

The analysis of this statement is needed in appraising the past performance, forecasting cash usage and evaluating the firm’s ability to satisfy its debts at maturity.

Statement of Cash Flows

the comparison of one firm of the past and present activities of the firm and forecast in the future.

Financial Statement Analysis

It permit comparisons over time and among companies, highlighting similarities, differences, and trends.

Ratios

Proficiency with common financial statement analysis techniques benefits both internal and external users.

Ratios

Steps in Financial Statement Analysis

Understand the Financial Statements, Collect Relevant Data, Perform Ratio and Other Analysis, Interpret the Results, Develop Conclusions and Recommendations, Follow-up and Continuous Monitoring

Gain in-depth knowledge of the income statement, balance sheet, and cash flow statement, including their components and interrelationships.

Understand the Financial Statements

Gather financial statements for multiple periods and, if possible, for peer companies or industry benchmarks.

Collect Relevant Data

Calculate key financial ratios and conduct horizontal and vertical analyses to identify trends, proportions, and relationships.

Perform Ratio and Other Analysis

Analyze the computed metrics in the context of industry norms, company strategy, and economic conditions.

Interpret the Results

Formulate insights regarding the company’s financial health, investment potential, creditworthiness, or operational efficiency

Develop Conclusions and Recommendations

Periodically update the analysis to track changes and adjust recommendations as necessary

Follow-up and Continuous Monitoring

Common Techniques Used in Financial Statement Analysis

Horizontal Analysis, Vertical Analysis

Compares financial data across multiple periods to identify trends and growth patterns.

Horizontal Analysis

It calculates percentage changes in line items year-over-year to detect increases or decreases in revenues, expenses, assets, or liabilities.

Horizontal Analysis

uses a significant item in the financial statement as base value

Vertical Analysis

each account in the financial statement is expressed by dividing them into a common base account (total assets, liabilities, equity, sales or net sales.

Common Size Statement

involves calculating financial ratios that measure: Profitability, Liquidity, Leverage or Solvency, Asset Utilization or Activity

Financial Ratio/Ratio Analysis

shows the earnings of the operation of the company; highlights the firm’s effectiveness in handling its operations

Profitability

shows the firm’s ability to meet its maturing short-term obligations.

Liquidity

ability to meet long-term obligations as they become due

Leverage or Solvency

shows how quickly various accounts are converted to sales of cash

Asset Utilization or Activity

Shows the firm’s stock price

Market Value