Course 12 - Financial: Financial analysis, balance sheet and income statement

Question 1

Chart of Accounts (COA)

Answer 1

=> ordered listing of accounts that comprises a company general ledger

• operative COA (main): day-to-day transactions
• country-specific COA
• group accounts (multiple companies)

=> common practice: implementing multiple ledgers and using each ledger for specific purposes (leading ledger, for all companies; non-leading ledger, for local companies)

Question 2

Financial Master Data: set of books

Answer 2

=> complete and consistent set of accounting data that is required for statutory reporting and creating financial statements

=> comprises general ledger and all sub-ledgers

Question 3

Set of books - settings

Answer 3

=> accounting principle (IFRS, etc.)

=> reporting principle (function of expense method, profit centre reporting,…)

=> Charts of accounts (structure, numbering of accounts)

=> fiscal year variant (fiscal year matches calendar year or not)

Question 4

Financial analysis ->

Answer 4

1. Objective
2. Payment monitoring (receivables, payables)
3. Liquidity management
4. Financial reporting

Question 5

Customer credit limit ->

Answer 5

1. Definition (generic, cust.-specific credit limit)
2. Strategic (increase liquidity, retain cust., minimize risks
3. Responsibilities (financial, sales dpmt, controlling)
4. Operational (monitoring of pay. transactions, payment terms, dunning,…)

Question 6

Organizational Master Data

Answer 6

=> divided in unit
=> company is the smallest unit for which individual financial statements can be produced
=> company is used with a set of books

Question 7

ERP for Financial Mgmt - benefits

Answer 7

=> no redundant data entry
=> instant financial reporting and analytics
=> automation of routine tasks
=> optimized payments
=> support for multiple sets of books
=> innovative functions
=> streamlined period-end closing