Accounting Analysis

1. Accounting Analysis James Godrich 22/11/2018

2. What Will I Learn? • Income Statement • Balance Sheet • Cash Flow Statement • Naughties

5. Cost of Goods Sold: ‘is the direct costs attributable to the production of the goods sold in a company. This amount includes the cost of the materials used in creating the good along with the direct labour costs used to produce the good. It excludes indirect expenses such as distribution costs and sales force costs.’ Source: Investopedia Gross Profit

6. Selling, General & Administrative Expense: ‘is reported on the income statement as the sum of all direct and indirect selling expenses and all general and administrative expenses (G&A) of a company. It includes all the costs not directly tied to making a product or performing a service.’ Source: Investopedia Operating Profit

7. Net Income

8. Income Statement

9. Balance Sheet

10. Current Assets Non Current Assets = Current Liabilities Non Current Liabilities + Share Capital Retained Earnings Balance Sheet

11. Balance Sheet

12. Cash Flow Statement CFO – cash flow from day-to-day operations CFI – cash flow from investment or disposal in assets CFF – cash flow from company financing

13. Cash Flow Statement

14. What do we like?

15. And how do we measure it? FCFF = CFO + Int(1-tax rate) - Capex

16. Berendsen

17. Off BS Gearing (pension & leases) – are they hiding debt where I might not normally look? • Working Capital movements – is there any reason to be suspicious about WC? • Capex – has the asset base been underinvested? • Exceptionals – are exceptionals truly exceptional? Naughties