12 - financial statements Flashcards
SPL - Gross profit
Revenue - cost of sales
COS = opening inv + purchases - closing inv.
Watch out for impairments. For manufacturing companies - this cost of sales includes production or factory costs.
How do you split up expenses usually?
COS
Distro costs
Admin expenses
Tax expense?
It should be our estimate of tax this year +- any under or over estimate from the prior year.
What is retained earning?
It is the profit for the year that is added to the retained earning reserve in the SOFP.
How are the expenses shown?
They must be shown as (-ve) in the PNL
How are the assets grouped?
The tangible NCA are grouped together, also known as PPE. Their closing CV is shown on the SOFP. This is their cost - their accumulated depn
Other intangible assets are shown separately at their closing CV which is cost - amortisation
What should the order of the current assets be?
They should be in order of increasing liquidity.
Cash would always be last
What inventory is shown?
Closing inventory is always shown
What receivables is shown?
The net between trade receivables and the allowance provided.
How is the equity section shown.
This is your capital section
Share capital - equity shares is shown first. This is number of ordinary shares x nominal value.
Then share premium.
Then retained earning - this is b/f retained earnings from last year + bottom line profit you just calculated from profit or loss - any dividends on your shares
How are liabilities split up?
Non current are more than 12 months - long term borrowings
Current are less than 12 months - Trade payables and accruals. Deferred income. Short term borrowings (bank overdraft)
Provisions
Current tax payable
What does the statement of changes in equity for the show?
SC SP RE, other reserves and the total from last year and any changes this year
How to calc Retained earnings?
B/f RE - CY profits - dividends = C/f RE
How to calc PPE?
TB cost - acc depn - depn for year
