Taloudellisten raporttien elementit

Question 1

Beginning balance sheet and ending balance sheet

Answer 1

Beginning balance sheet is the same as the ending balance sheet of the previous fiscal year.

Question 2

How do we go from beginning balance sheet to Ending balance sheet?

Answer 2

Beginning balance sheet
- Cash and Equity

VÄLISSÄ:

1. Statement of Cash Flows = Net change in cash
2. Statement of Shareholders’ Equity = Net change in Equity
3. Income Statement = Net income

SAADAAN:
Ending Balance sheet
- Cash and Equity

Question 3

Equity

Answer 3

BALANCE SHEET

Equity
= ((Cash + Other assets) / Total assets) - Liabilities

Question 4

Net income

Answer 4

INCOME STATEMENT

Net income
= Revenues - Expenses

Question 5

Net change in cash

Answer 5

STATEMENT OF CASH FLOWS

Net change in cash 
-> lisätään tai vähennetään: 
=
cash from operations
cash from investing
cash from financing

Question 6

Net change in Equity

Answer 6

STATEMENT OF SHAREHOLDERS’ EQUITY

Net change in Equity 
= 
\+ Investments by owners
-  Dividend
\+ Earnings

Question 7

Accrual accounting

Answer 7

Suoriteperusteinen kirjanpito

Accrual accounting is an accounting method where revenue or expenses are recorded when a transaction occurs. (NOT when payment is received or made.)

Question 8

How Accrual accounting and Amount of cash generated from operations liittyvät toisiinsa?

Answer 8

Accrual accounting decouples measured earnings (net income) from the amount of cash generated from operations.

Accrual accounting revenues generally do not correspond to cash receipts for the period, nor do accrual expenses always correspond to cash outlays for the period.

DECOUPLES = separates eli irroittaa

Question 9

Lue vaan

Answer 9

Accrual accounting can produce large discrepancies (eroavuus) between measured earnings and the amount of cash generated from operations.

Accrual earnings is a more accurate measure of the value creation during the period than is operating cash flow.

Question 10

What Income statement reports?

Answer 10

Income statement reports the accumulation of costs and revenues during the fiscal year.

Question 11

What Income statement contains?

Answer 11

• MUST contain as minimum information (IAS 1.82):
  a) Revenues (Sales)
  b) Finance costs
  c) Share of the profit or loss of associates and joint ventures
  d) Tax expense
  e) Total of discontinuing operations
• Statement of profit or loss and other comprehensive income
• Income attributable to controlling and non-controlling owners

Question 12

Why do companies calculate and disclose non-IFRS numbers?

Siis IFRS numeroiden lisäksi.

Answer 12

In non-IFRS numbers the company makes adjustments to IFRS numbers. Companies use them because IFRS numbers are calculated under the GAAP (in this case under IFRS).

ESIMERKIKSI:

• IFRS: operating profit and operating margin
• non-IFRS: ADJUSTED operating profit and margin.

Question 13

TRUE OR FALSE:

Adjusted Eli non-IFRS numbers are always bigger than IFRS numbers?

Answer 13

TRUE!

Adjusted (Eli non-IFRS) numbers are ALWAYS greater than the IFRS numbers.

Question 14

Why do people criticise the use of non-IFRS numbers?

Answer 14

That is because non-IFRS numbers tend to make things look BETTER.

Question 15

Non-IFRS numbers Eli

Answer 15

On sama asia kun:

Alternative performance measures TAI Adjusted numbers

Question 16

Mitä tieto sanoo niiden Alternative performance measurien laskemisesta niiden vuosikertomuksessa?

Answer 16

Tieto presents certain financial measures, which, in accordance with the “Alternative Performance Measures” guidance issued by the European Securities and Markets Authority (ESMA), are not accounting measures defined or specified in IFRS and are, therefore, considered alternative performance measures. Tieto believes that alternative performance measures provide meaningful supplemental information to the financial measures presented in the consolidated financial statements prepared in accordance with IFRS and increase the understanding of the profitability of Tieto’s operations. Alternative performance measures are not accounting measures defined or specified in IFRS and, therefore, they are considered non-IFRS measures, which should not be viewed in isolation or as a substitute to the IFRS financial measures.

Question 17

Adjusted operating profit (EBIT)

Answer 17

Operating profit + adjustments

Question 18

Adjusted operating profit margin (EBIT), %

Answer 18

Adjusted operating profit (EBIT) / Net sales

Question 19

Adjustments

Eli mitä lisätään/vähennetään, että päästään operating profit -> adjusted operating profit

Answer 19

Adjustments:

Operating profit (EBIT)  
\+ restructuring costs
\+/- capital gains/losses
\+ goodwill impairment charges
\+ other items affecting comparability
= 
Adjusted operating profit (EBIT)

Question 20

Do we need balance sheet when calculating financial ratios?

Answer 20

Balance sheet is needed in almost all of the financial ratios.

When calculating financial ratios and doing financial analysis we typically combine information from the income statement and the balance sheet.

Question 21

What information balance sheet helps to assess?

Answer 21

It helps in assessing the company’s

1. rates of return (ROA, ROCE)
2. Capital structure (Debt vs. Equity)
3. Liquidity (cash conversion)
4. Solvency (Ability to pay debt)
5. Working capital (Efficiency)

Question 22

What is Goodwill?

Answer 22

Goodwill is an intangible asset that accounts for the excess purchase price of another company.

Specifically, goodwill is the portion of the purchase price that is higher than the sum of the net fair value of all of the assets purchased in the acquisition and the liabilities assumed in the process. The value of a company’s brand name, solid customer base, good customer relations, good employee relations, and proprietary technology represent some reasons why goodwill exists.

Question 23

Retained earnings

Answer 23

Retained earnings (RE) is the amount of net income left over for the business after it has paid out dividends to its shareholders.

The word “retained” captures the fact that because those earnings were not paid out to shareholders as dividends they were instead retained by the company. For this reason, retained earnings decrease when a company either loses money or pays dividends, and increase when new profits are created.

Question 24

Balance sheet sides, what do they consist of?

Answer 24

Left (or up) we have the assets.

And on the right (or down) we have liabilities and equity.

Question 25

What are the 3 types of cash flows we have in the statement of cash flows?

Answer 25

Cash flow from

1. operating activities
2. investing activities
3. financing activities

Together these make up the change in cash and cash equivalents.
Sitten lisätään se viime vuoden lopun (eli tän vuoden alun) cash and cash equivalents, niin saadaan –> CASH AND CASH EQUIVALENTS that we see in the balance sheet.

Question 26

Mitä tämä tilinpäätöksen päälaskelma kertoo:

Statement of the changes in equity

Answer 26

Statement of the changes in equity describes how equity and its component have changed during the fiscal year.

It is a nice summary that tells you why equity has changed. It is not used in financial statement analysis, like the other main statements.

Question 27

Mistä johtuu changes in equity?

ajattele: Statement of the changes in equity

Answer 27

These changes occur for various reasons

1. Earnings generated during the fiscal year
2. Profit distribution (dividends)
3. Purchases of own shares
4. Option-based compensation
5. Revaluation