2 Flashcards
Wat is een financial statement
Written records that convey the business activities and the financial performance of an entity
Provide a snapshot of a corporation’s financial health at a particular point in time
Are all companies required to give financial information
Privately companies in the US don’t
Wat is een balance sheet
Financial snapshot of what a
company owns and what it owes, as
well as the amount invested by
shareholders
Waaruit bestaat de balance sheet
Assets: current + non current assets
liabilities: current + non current liabilities
Shareholder’s equity: share capital (total money of shares) + retained earnings
Wat zijn current assets en waaruit bestaat het
Current assets: assets that a company expects to convert into cash, sell, or use up within one year for example:
1: Cash and cash equivalents: Immediate liquid assets like currency or bank account balances.
2: Accounts receivable: Money owed to the business by customers for goods or services already delivered.
3: Inventory: Goods that are held for sale or manufacturing materials.
4: Prepaid expenses: Payments made in advance for services or goods to be received in the future, such as insurance premiums or rent.
Wat zijn non current assets
Long-term assets: assets that a company expects to hold for more than one year for example:
1. Property, Plant, and Equipment (PP&E): Tangible fixed assets like buildings, machinery, and land.
2. Intangible assets: Assets that lack physical form but have value, such as patents, trademarks, goodwill, and copyrights
Wat zijn current liabilities
Current liabilities: obligations or debts that a company must settle within one year or within for example:
1. Accounts payable: Money the company owes to suppliers for goods or services it has received but not yet paid for.
2. Short-term debt: Any borrowings or loans that are due to be repaid within a year.
3. Accrued expenses: Expenses that have been incurred but not yet paid, such as wages payable or taxes payable.
4. Current portion of long-term debt: The part of long-term debt that is due within the next year.
Wat zijn non current liabilities
Long-term Liabilities: obligations or debts that a company is not required to pay off within the next year for example:
Long-term debt: Loans or bonds that are due in more than one year, such as mortgages, corporate bonds, or bank loans
Wat is networking capital
Difference between current assets and current liabilities
Hoe bereken je de revenue
money from selling goods – allowances (refunds customers get after sales) and discounts
Revenue= sales x price
Hoe bereken je gross profit
Gross Profit = Revenues – COGS (Costs Of Goods Sold)
Wat zijn selling expenses SG&A expenses
Marketing, Advertising, and Promotion Expenses
SG and A expenses are selling general and administartice expenses together
Hoe bereken je EBITDA (Earnings before Interest Taxes Depreciation and Amortization)
EBITDA (Earnings before Interest Taxes Depreciation and Amortization) = Gross Profit – SG&A Expenses
Wat is Depreciation & Amortization Expense
Costs associated with allocating the value of an intangible asset over a specified period like patents or copyright
Hoe bereken je EBIT (Earnings before Interest and Taxes)
EBIT (Earnings before Interest and Taxes) = EBITDA – D&A Expense
Wat is interest
Cost of borrowing money loans
How bereken je net income
Net Income = EBIT – Interest – Taxes
Hoe bereken je de after tax operating income
EBIT but after the taxes but before the interest so you subtract the taxes but not the interest
Welke verschillende type costs zijn er
Direct costs: Costs of the production of the product or service (reported as COGS)
Variable costs: Costs that fluctuate depending on the volume for example materials or direct labor expense (work)
Fixed costs: Costs that don’t fluctuate with the volume for example machinery
Indirect costs: Costs that are not used for the production of the product (reported as SG&A)
Variable: Electricity and gas, marketing
Fixed: Rent, insurance and supplies
Wat is een cash flow statement
Acts as a bridge between the income statement and the balance sheet by showing how money (cash) moved in and out of the business
Waaruit bestaat een cash flow statement
1: Cash flows from operating activities:
Includes transactions from all operational business activities, e.g., buying and selling inventory and supplies, along with paying employee salaries.
2: Cash flows from investing activities:
Is the result of investment gains and losses, e.g., buying and selling property and equipment (capital expenditures or CapEx).
3: Cash flows from financing activities:
An overview of cash used in business financing, e.g., money paid out as dividends or via share repurchases, loans taken out or paid back
Wat is de direct en indirect method of presentation
Direct is money received - money paid for operating investing and financing activities
Indirect is net income and you add:
Depreciation expense;
Decrease in accounts receivable;
Decrease in inventory;
Increase in accounts payable
Wat zijn drie technieken om financial statements te analyseren
Horizontal analysis: compares historical data to detect growth trends (common-base or trend analysis)
Amount in comparison year- amount in base year / amount in base year x 100%
Vertical analysis: compares financial statement items in relation to each other
Percentages of different parts of liabilities of total amount of liabilities
Ratio analysis: uses a combination of financial statements to assess a company’s financial condition and performance
Track company performance could do this in 3 different ways
Intracompany: same company different years
Intercompany: different companies
Industry averages: compare a company with the average in the industry
Wat is een andere manier om de net income te berekenen
Net income = Increase in retained earnings + Dividends
Hoe bereken je return on capital
Return on capital= After tax operating income/ Long-Term Debt, Leases, and Shareholders’ Equity
After tax operating income: This is the profit a company makes from its operations after taxes, but before interest expenses are subtracted (because ROC focuses on operating efficiency, excluding financing costs).
NetIncome+InterestExpense×(1−TaxRate)
Hoe bereken je de operating profit margin
Operating profit / revenue x 100%
OperatingProfit = Revenue−CostofGoods Sold(COGS)−OperatingExpenses
Hoe bereken je Times interest earned
Ebit/ interest expense
Hoe bereken je het cash coverage ratio
Ebit + depreciation / interest expense
