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MindMap Gallery CFA Financial Statement Analysis Income Statement (Test Points 6-10)

CFA Financial Statement Analysis Income Statement (Test Points 6-10)

CFA financial statement analysis and income statement (test points 6-10) knowledge combing, this chart clearly combs the knowledge, very practical, worth collecting.

Edited at 2022-12-21 19:46:20

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CFA Financial Statement Analysis Income Statement (Test Points 6-10)

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Outline

CFA Financial Statement Analysis Accounting Fundamentals (Test Points 1-5)
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CFA Financial Statement Analysis Income statement (test points 6-10)

6. Commonly used formats of income statements

net revenue-cost of good sold(COGS)=gross profit gross profit

gross profit-SG&A selling and administrative expenses=operating income operating profit

operating income /-other income /-gain/loss (natural disaster/asset restructuring/sale of assets)=EBIT

EBIT-interest expense=EBT

EBT-tax expense=net income from continuing operations

net income from continuing operations /-gain/loss from discontinued operations (eg: accounting policy adjustment) = net income

Cost classification

by nature

Depreciation of production machines and office machines are all included in Depreciation

by function by function

Depreciation of production machinery is classified as COGS, and depreciation of office machinery is classified as SG&A.

7. Recognition of income and expenses

general principles

accrual methodaccrual method

matching principlematching principle

Five steps to recognize revenue

Together: Identify the contract

Meaning: Identify performance obligations

Price: Determine the transaction price

Divide: Allocate the transaction price to each performance obligation in proportion to its fair value.

Receipt: Revenue is recognized when conditions are met

Why fake breakup

Note: If the company is an agent, the net amount method should be used to recognize revenue.

Calculating question inspection percentage completion method

Percent Complete = Cost Incurred/Total Cost

8. Earnings per share

basic EPS

new issue additional issuance/repurchase repurchase

weighted by time

stock dividend stock dividend/split stock split

Not weighted by time, only affects the number of shares before the split time

"new-for-old split"

eg: 3-for-2 split

2 shares split into 3 shares

1 stock dividend for every 2 shares

Potential factors leading to dilution

convertible preferred stock convertible preferred stock

Numerator Convertible Preferred Stock Dividends

Denominator Number of shares converted into convertible preferred stock

convertible debt convertible debt

Numerator After-tax interest on convertible bonds

Denominator: The number of shares converted into convertible bonds

call warrant

Denominator Number of warrants* (1-exercise price/average stock price for the year)

diluted EPS

If diluted EPS is greater than basic EPS, let diluted EPS = basic EPS and reject anti-dilution.

9. Comprehensive income

comprehensive income(CI)=net income(NI) other comprehensive income(OCI)

5 items recorded in OCI

foreign currency translationforeign currency conversion difference

Note that it is not a transaction transaction, the transaction should be classified as NI

DB plan defined benefit plan

unrealized gain/losses from cash flow hedging derivativesUnrealized gain/losses from cash flow hedging derivatives

Unrealized gain/losses from FVOCI Unrealized fair changes are included in the gains and losses of other comprehensive income

valuation surplus for long-lived asset long-term asset appreciation (IFRS only)

10. Analysis of the proportion of income statement to base

For companies of different sizes, comparison of income statement items should be based on Revenue.