FINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSIS

Next in Agenda is to understand Next in Agenda is to understand

Financial Statements of Foreign Financial Statements of Foreign

Companies…Companies…

But, first a curiosity …

• Siemens AG

Wittelsbacherplatz 2

D-80333 Munich

Germany

What is it? Aktiengesellschaft??

FINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSIS

Let’s proceed for understanding financial statements of SIEMENS …

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Siemens AG follows… IFRS/IAS for preparing consolidated financial

statements which we are going to discuss.

German GAAP - Short for “Generally Accepted Accounting Principles in Germany.” The accounting concepts, measurements, techniques and standards of presentation used in financial statements in Germany pursuant to the German Commercial Code (HGB).

FINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSIS

First, we take Balance sheet …

…Assets Side

Reducing Liquidity

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Cash and Cash Equivalents… Cash includes money an entity holds and money

deposited with financial institutions that can be withdrawn without notice.

Cash equivalents are defined as short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. The "short-term" characteristic of a cash

equivalent is generally taken as a maturity of three months from the date of acquisition. 

FINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSIS

Financial Assets … All financial assets are to classified as …

(a) FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

(b) HELD-TO-MATURITY INVESTMENTS

(c) LOANS AND RECEIVABLES,

(d) AVAILABLE-FOR-SALE

…Available for Sale Financial Assets are those financial assets that are designated as available for sale or are not classified as (a), (b) or (c).

FINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSIS

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Goodwill…? Goodwill is defined as the excess of cost of an acquired

entity over the amounts assigned to assets acquired and liabilities assumed.

On January 2, 2007, Siemens completed the acquisition of the diagnostics division of Bayer Aktiengesellschaft (Bayer).

On May 4, 2007, Siemens completed the acquisition of U.S.-based UGS Corp. (UGS), one of the leading providers of product lifecycle management (PLM) software and services for manufacturers.

FINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSIS

INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD…

In its consolidated financial statements, an investor should use the equity method of accounting for investments in associates.[IAS-28]

Under the equity method of accounting, an equity investment is initially recorded at cost and is subsequently adjusted to reflect the investor's share of the net profit or loss of the associate. [IAS 28]

FINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSIS

Now, let’s move to …

…Liabilities Side

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Now, let’s move towards Now, let’s move towards understanding of ……understanding of ……

PROFIT AND LOSS ACCOUNT…PROFIT AND LOSS ACCOUNT…

Now, we move to …Now, we move to …

CASH FLOW STATEMENT …

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All this is ………… our story about understanding financial statements

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