Financial Statement #1 - 2007
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Transcript of Financial Statement #1 - 2007
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FINANCIAL STATEMENT ANALYSIS
Have you ever wondered what an
analyst does with the financial
statements of a company?
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FINANCIAL STATEMENT ANALYSIS
Do you believe that the financial position of a
company as revealed by its financial statements
is as clear as a blue sky without any clouds?
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FINANCIAL STATEMENT ANALYSIS
A good growth of a company in the recent past implies
the same story in future and hence, it represents a
good investment opportunity!!! Will you like to grab it?
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FINANCIAL STATEMENT ANALYSIS
Do not you ever wonder that a company is
earning good profits but they have no money to
pay any dividend to the shareholders??!!!!!!!!!
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FINANCIAL STATEMENT ANALYSIS
And, so on
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FINANCIAL STATEMENT ANALYSIS
If you are really and seriouslylooking answers of all these
Then ...
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Dr. C. P. Gupta
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FINANCIAL STATEMENT ANALYSIS
Humbleobjectivesof the Course are
make the participants comfortable with the mysteries lyingbehind the financial numbers contained in financial statements.
make the participants aware of the properties of numbers
derived from financial statements.
equip the participants with necessary tools and techniques toderive meaningful information to make sound decisions thatrequire use of information from financial statements.
allow the participants to explore and fathom out the strengthsand limitations of the numbers derived from financialstatements.
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9/46Our FIRST STEP is
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Towards
Understanding..
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Financial Statement Analysis
Financial Statement Analysis comprises alltechniques employed by users of financialstatements to show important relationships inthe financial statements so as to understand
business and make decisions in a better way.
is a process of evaluating the relationship
between components parts of financialstatements to obtain a better understandingof a firms financial position and performance.
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Steps in Financial Statement Analysis
First StepSelect Information relevant todecision under consideration
Second StepProcess the information to
Highlight significant relationships
Third StepInterpret and draw
Necessary inferences
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Who are the people doing Financial Statement Analysis?
Two sets of peopleINTERNAL USERS
EXTERNAL USERS
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What is the source of information for the EXTERNALPEOPLE?
External users relyon publicly-availableinformation to
perform financialanalysis
Such information iscontained in acompanys annual
report
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THREE BASIC FINANCIAL STATEMENTS
1
Annual Report contains
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THREE BASIC FINANCIAL STATEMENTS
FOOTNOTES/SCHEDULES TO THE
FINANCIAL STATEMENTS1
2
Annual Report contains
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THREE BASIC FINANCIAL STATEMENTS
FOOTNOTES/SCHEDULES TO THE
FINANCIAL STATEMENTS
SUMMARY OF ACCOUNTING METHODS
1
2
3
Annual Report contains
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THREE BASIC FINANCIAL STATEMENTS
FOOTNOTES/SCHEDULES TO THE
FINANCIAL STATEMENTS
SUMMARY OF ACCOUNTING METHODS
MANAGEMENTS DISCUSSION AND
ANALYSIS OF FINANCIAL STATEMENTS
1
2
3
4
Annual Report contains
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FOUR BASIC FINANCIAL STATEMENTS
FOOTNOTES/SCHEDULES TO THE
FINANCIAL STATEMENTS
SUMMARY OF ACCOUNTING METHODS
MANAGEMENTS DISCUSSION AND
ANALYSIS OF FINANCIAL STATEMENTS
AUDITORS REPORT
1
2
3
4
5
Annual Report contains
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THREE BASIC FINANCIAL STATEMENTS
FOOTNOTES/SCHEDULES TO THE
FINANCIAL STATEMENTS
SUMMARY OF ACCOUNTING METHODS
MANAGEMENTS DISCUSSION AND
ANALYSIS OF FINANCIAL STATEMENTS
AUDITORS REPORT
COMPARATIVE FINANCIAL DATA FOR A
SERIES OF YEARS
1
2
3
4
5
6
Annual Report contains
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EXAMPLE #1.
THREE BASIC FINANCIAL STATEMENTS
1
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EXAMPLE #1.
THREE BASIC FINANCIAL STATEMENTS
1
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EXAMPLE #1.
THREE BASIC FINANCIAL STATEMENTS
1
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EXAMPLE #2.
FOOTNOTES/SCHEDULES TO THE
FINANCIAL STATEMENTS2
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EXAMPLE #3.
SUMMARY OF ACCOUNTING METHODS
3
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EXAMPLE #4.
MANAGEMENTS DISCUSSION AND
ANALYSIS OF FINANCIAL STATEMENTS
4
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EXAMPLE #5.
AUDITORS REPORT
5
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EXAMPLE #6.
COMPARATIVE FINANCIAL DATA FOR A
SERIES OF YEARS
6
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Now, we are ready with ALL NECESSARY BAGGAGE OFFINANCIAL INFORMATION.
FINANCIAL STATEMENT ANALYSIS
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FINANCIAL STATEMENT ANALYSIS
And, proceed for understandingfinancial statements of Nestle
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TOP LINE OF NESTL
FINANCIAL STATEMENT ANALYSIS
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LINE OF NESTL FINANCIAL STATEMENT ANALYSIS
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All this is our beginning to anew story