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MindMap Gallery CFA Financial Report Pre corse

CFA Financial Report Pre corse

Basic knowledge related to CFA exam financial reporting, including basic concepts and calculations, ratio analysis

Edited at 2019-07-30 14:21:17

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CFA Financial Report Pre corse

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Outline

Financial Reporting & Analysis

Introduction

Accounting Standards

GAAP (Accepted Accounting Principle)

FASB (Financial Accounting Standards Board)

IFRS (International Financial Reporting Standards)

IASB (International Accounting Standards Board)

SEC (Securities and Exchange Commission)

Accounting Elements

AssetAsset

Controlled & Expect to generate inflow

Liability liabilities

loan, bond, account payable, notes payable

purchase on creditpurchase on credit

Equity

net asset

owner's equity

Income

revenue

other incomeother operating income

gain non-operating income

Expense fee

COGS (Cost of Goods Sold main business/production related costs)

SG&A (Selling, general and administrative Cost)

Interest ExpenseFinancial expenses/debt interest

Income Tax ExpenseIncome Tax Expense

LossLoss

profitprofit

net income/the bottom line

Not one of the five elements

Accounting Equation

Asset=Liability Owner's equity

Net Income=Income-Expense

Asset Expense=Liability Capital Income-Expense

Financial Reporting

Income Statement

Gross ProfitGross Profit

Operating IncomeOperating Profit

EBIT Earnings before Interest and Taxes

EBT profit before tax

Depreciation ExpenseDepreciation expense

Amortization amortization expense

Implicit in COGS and SG&A

Interest Expense

Tax-deductible/Tax shield

Debt financing: interest payments are made before taxes are paid, reducing taxes Equity Financing: Dividends after tax

EPS (Earnings per share)

Basic EPS

Diluted EPS diluted earnings per share

Revenue Recognition

Accrual AccountingAccrual Accounting

Balance sheet

Assets

Current AssetslCurrent Assets

Cash and cash equivalentsCash and cash equivalents

Accounts receivableAccounts receivable

Sold on Credit

InventoryInventory

Goods for Sale Material for Manufacturing

Cost flow method

Specific identification method

FIFO (First-in, First-out method first-in first-out method)

LIFO (Last-in, First-out method last-in-first-out method)

Pay less tax, not allowed by IFRS

Weighted average cost methodWeighted average cost method

Prepaid ExpensePrepaid Expense

Non-current AssetsNon-current Assets

PP&E (Property, plant and Equipment—— Tangible Assets Tangible/Fixed Assets)

Land has no depreciation; it is an intangible asset in China

Straight-line Depreciation Straight-line depreciation method

Depreciation Expense=（Cost—Residual Value）/useful life

Double declining balance depreciation double depreciation method

Depreciation Expense=（Cost-Accumulative depreciation）/useful life X 2

Patents, Trademark, Copyright Goodwill Goodwill - Intangible Assets

Financial AssetsFinancial Assets

Held-to-maturity securities Held-to-maturity financial assets - debt security / bond

Trading SecuritiesTrading Financial Assets

Available-for-sale Securities Available-for-sale financial assets

Measurement of Assets

Historical Cost

Mostly used in PP&E fixed assets

Fair Value

Arm's-length transaction

Current cost, Realizable value, Present value, Amortized cost

Liabilities

Current liabilities

Account payableAccounts payable

Purchase on credit

Accrued expenseAccrued expenses

wage payable, tax payable, interest payable, dividend payable

Unearned revenueAccounts received in advance

Payment has been received, but delivery has not been made

Non-current liabilities

Debt payable long-term payable

Long-term debt long-term interest-bearing debt

Bank loansBank loans

Notes payable to pay medium-term debt

Bonds payable to pay long-term debt

Lease payable long-term lease payment

finance lease

Owner's equity

Contributed capital has invested capital

Preferred stock preferred stock

Priority in dividends, priority in payment, no voting rights

Common stock normal stock

Have the right to dividends and have the right to vote

Additional paid-in capital Equity premium

Treasury stock

No dividend rights, no voting rights

Retained earningsRetained earnings

Accumulated PCI Accumulated other comprehensive income

Four American Standards

Foreign currency translationCurrency conversion

minimum pension liabilitypension

derivationpension

available for sale securities available for sale financial assets

International standards plus one

Revaluation surplus Asset revaluation appreciation

Non-controlling (minority) interest minority shareholders' equity

Cash flow statement

GAAP

CFO (Cash by operating activities) operating activities

CFI (Cash by investing activities investment activities

CFF (Cash by financing activities) financial activities

IFRS

Footnotes Financial Statement Notes

AuditedNeed to be audited

Accounting methods/accounting assumptions/acquisitions and mergers/legal proceedings/asset disposal, etc.

Supplemental Disclosure

Not auditedNo audit required

MD&A (Management's Discussion and Analysis) management analysis and discussion

Audit ReportAudit Report

Unqualified opinionUnqualified opinion

Qualified OpinionReserved

Adverse opinionNegative opinion

Disclaimer of opinionRefuse to express an opinion

Fundamental of Analysis

Profitability ration Profitability ratio

Net profit marginnet profit margin

Net income/Sales revenue X 100%

Gross profit marginGross profit margin

Gross profit/Sales revenue X 100%

Activity ratio

Liquidity ratio

Solvency ratio

Valuation Ratio