Financial Statement Analysis: Methods Overview Financial Statement Analysis: Methods Overview.
Financial Statement Analysis 3
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Transcript of Financial Statement Analysis 3
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 …
FINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSIS
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
FINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSIS
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deposited with financial institutions that can be withdrawn without notice.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
FINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSIS
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
FINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSIS
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 …
FINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSIS
All this is ………… our story about understanding financial statements
WHAT NEXT IN OUR WHAT NEXT IN OUR AGENDA?AGENDA?