完整word版财务报表分析英文版Word文档下载推荐.docx

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sfinancialcondition.

Theincomestatement:

reportsonthe"

performance"

ofthefirm.

Thestatementofcashflows:

reportsthecashreceiptsandcashoutflowsclassifiedaccordingtooperating,investmentandfinancingactivities.

Thestatementofstockholder'

sequity:

reportstheamountsandsourcesofchangesinequityfromtransactionswithowners.

Thefootnotesofthefinancialstatements:

allowusestoimproveassessmentoftheamount,timinganduncertaintyoftheestimatesreportedinthefinancialstatements.

Themostaccuratewaytomeasuretheresultsofenterpriseactivitywouldbetomeasurethematthetimeoftheenterprise'

seventualliquidation.Business,government,investors,andvariousotherusergroups,however,cannotwaitindefinitelyforsuchinformation.Ifaccountantsdidnotprovidefinancialinformationperiodically,someoneelsewould.

Theperiodicityortimeperiodassumptionsimplyimpliesthattheeconomicactivitiesofanenterprisecanbedividedintoartificialtimeperiods.Thesetimeperiodsvary,butthemostcommonaremonthly,quarterly,andyearly.

Theinformationmustbereliableandrelevant.Thisrequiresthatinformationmustbeconsistentandcomparableovertimeandalsobeprovidedonatimelybasis.Theshorterthetimeperiod,themoredifficultitbecomestodeterminethepropernetincomefortheperiod.Amonth'

sresultsareusuallylessreliablethanaquarter'

sresults,andaquarter'

sresultsarelikelytobelessreliablethanayear'

sresults.Investorsdesireanddemandthatinformationbequicklyprocessedanddisseminated;

yetthequickertheinformationisreleased,themoreitissubjecttoerror.Thisphenomenonprovidesaninterestingexampleofthetrade-offbetweenrelevanceandreliabilityinpreparingfinancialdata.

Inpractice,financialreportingisdoneattheendoftheaccountingperiod.Accountingperiodscanbeanylengthintime.Firmstypicallyusetheyearastheprimaryaccountingperiod.The12-monthaccountingperiodisreferredtoasthefiscalyear.Firmsalsoreportforperiodslessthanayear（e.g.quarterly）onaninterimbasis.

Accountingperiodmustbeofequallength.Financialstatementsarepreparedattheendoftheregularaccountingperiodtoallowcomparisonacrosstime.

b.explainwhytheaccountsmustbeadjustedattheendofeachperiod.Why?

Mostexternaltransactionsarerecordedwhentheyoccur.Theemploymentofanaccrualsystemmeansthatnumerousadjustmentsarenecessarybeforefinancialstatementsarepreparedbecausecertainaccountsarenotaccuratelystated.

Someexternaltransactionsmightnotevenseemliketransactionsandarerecognizedonlyattheendoftheaccountingperiod.Examplesincludeunrecordedrevenuesandcreditpurchase.

Someeconomicactivitiesdonotoccurastheresultofexternaltransactions.Examplesincludedepreciationandtheexpirationofprepaidexpenses.

Timing:

Oftenatransactionaffectstherevenueorexpensesoftwoormoreaccountingperiods.Therelatedcashinfloworoutflowdoesnotalwayscoincidewiththeperiodinwhichtheserevenueorexpenseitemsarerecorded.Thus,theneedforadjustingentriesresultsfromtimingdifferencesbetweenthereceiptordisbursementofcashandtherecordingofrevenueorexpenses.Forexample,ifwehandletransactionsonacashbasis,onlycashtransactionsduringtheyeararerecorded.Consequently,ifacompany'

semployeesarepaideverytwoweeksandtheendofanaccountingperiodoccursinthemiddleofthesetwoweeks,neitherliabilitynorexpensehasbeenrecordedforthelastweek.Tobringtheaccountsuptodateforthepreparationoffinancialstatements,boththewageexpenseandthewageliabilityaccountsneedtobeincreased.

Anecessarystepintheaccountingprocess,then,istheadjustmentofallaccountstoanaccrualbasisandtheirsubsequentpostingtothegeneralledger.Adjustingentriesarethereforenecessarytoachieveapropermatchingofrevenuesandexpensesinthedeterminationofnetincomeforthecurrentperiodandtoachieveanaccuratestatementoftheassetsandequitiesexistingattheendoftheperiod.

Adjustmentprinciples

·

Therevenuerecognitionprinciple

Thematchingprinciple

Whattoadjust?

Eachadjustingentryaffectsbotharealaccount（assets,liability,orowner'

sequity）andanominalorincomestatementaccount（revenueorexpense）.Thefourbasictypesofadjustingentriesare:

deferredexpensesthatbenefitsmorethanoneperiod:

forexample,prepaidexpenses（e.g.prepaidinsurance,rent）areexpensespaidinadvanceandrecordedasassetsbeforetheyareusedorconsumed.Whentheseassetsareconsumed,expensesshouldberecognized:

adebittoanexpenseaccountandacredittoanassetaccount.Anotherexampleisdepreciation.Thecostofalong-termassetisallocatedasanexpenseoveritsusefullife.Attheendofeachperioddepreciationexpenseisrecordedthroughanadjustingentry:

adebittoadepreciationexpenseaccountandacredittoanaccumulateddepreciationaccount（acontraaccountusedtototalthepastdepreciationexpensesonspecificlong-termassets）.

accruedexpensesthatincurredbutnotyetpaidorrecorded:

examplesareemployeesalariesandinterestonborrowedmoney.Attheendoftheaccountingperiod,theaccruedexpenseisrecordedthroughanadjustingentry:

adebittoanexpenseaccount（i.e.SalariesExpense）andacredittoaliabilityaccount（i.e.SalariesPayable）.

Accruedrevenuesthatearnedbutnotyetreceivedorrecorded:

alsocalledunrecordedrevenues.Examplesincludeinterestrevenues,rentrevenues,etc.Suchrevenuesaccumulatewiththepassingoftime,butthefirmmayhavenotreceivedthepaymentorbilledtheclient.Anadjustingentryshouldbe:

adebittoanassetaccount（i.e.AccountsReceivable）andacredittoarevenueaccount（i.e.InterestRevenue）.

Unearnedrevenuesthatarerevenuesreceivedincashbeforedeliveryofgoods/services:

examplesaremagazinesubscriptionfees,customerdepositsforservices.These"

revenues"

arenotearnedyetandthusshouldberecordedasliabilities.Anadjustingentryshouldbe:

adebittoaliabilityaccount（i.e.UnearnedRevenue）andacredittoarevenueaccount（i.e.Revenue）.

RevenuePrinciple:

basisforrecordingrevenues（ietellswhentorecordrevenueandtheamounts）.

MatchingPrinciple:

basisforrecordingexpensis（iedirectiontoIDallexpensesduringtheperiod,measurethem,andmatchthemagainsttherevenuesearnedinthatperiod）.

c.explainwhytheaccrualbasisofaccountingproducesmoreusefulincome

statementsandbalancesheetsthanthecashbasis.

Revenueissomethingearnedthroughthesaleofgoodsorservices.Notallcashreceiptsarerevenues;

forexample,cashreceivedthroughaloanisnotrevenue.Expensesarethecostofgoodsorservicesusedtogeneraterevenues.Notallcashpaymentsareexpenses;

forexample,cashdividendspaidtostockholdersarenotexpenses.Netincomeisthedifferencebetweenrevenuesandexpenses.Itisreportedontheincomestatement,andisthefocusinevaluatingafirm'

sprofitability.

Mostcompaniesusetheaccrualbasisaccounting,recognizingrevenuewhenitisearned（thegoodsaresoldortheservicesperformed）andrecognizingexpensesintheperiodincurred,withoutregardtothetimeofreceiptorpaymentofcash.Netincomeisrevenueearnedminusexpensesincurred.

Underthestrictcashbasisaccounting,revenueisrecordedonlywhenthecashisreceivedandexpensesarerecordedonlywhenthecashispaid.Netincomeiscashrevenueminuscashexpenses.Thematchingprincipleisignoredhere,resultinginconformitywithgenerallyacceptedaccountingprinciples.

Today'

seconomyisconsiderablymorelubricatedbycreditthanbycash.Andtheaccrualbasis,notthecashbasis,recognizesallaspectsofthecreditphenomenon.Investors,creditors,andotherdecisionmakersseektimelyinformationaboutanenterprise'

sfuturecashflows.Accrualbasisaccountingprovidesthisinformationbyreportingthecashinflowsandoutflowsassociatedwithearningsactivitiesassoonasthesecashflowscanbeestimatedwithanacceptabledegreeofcertainty.Receivablesandpayablesare

forecastersoffuturecashinflowsandoutflows.Inotherwords,accrualbasisaccountingaidsinpredictingfuturecashflowsbyreportingtransactionsandothereventswithcashconsequencesatthetimethetransactionsandeventsoccur,ratherthanwhenthecashisreceivedandpaid.Accrualaccountinggenerallyprovidesabetterindicationofperformancethancashbasisofaccountingsinceitincreasesthecomparabilityofincomestatementsandbalancesheetsacrossperiods.

B.FinancialReportingandAnalysis

a.defineeachassetandliabilitycategoryonthebalancesheetandprepareaclassifiedbalancesheet.

Thinkofthebalancesheetasaphotoofthebusinessataspecificpointintime.Itpresentstheassets,liabilities,andtheequityownershipofabusinessentityasofaspecificdate.

Assetsaretheeconomicresourcescontrolledbythefirm.

Liabilitiesarethefinancialobligationsthatthefirmmustfulfillinthefuture.Liabilitiesaretypicallyfulfilledbypaymentofcash.Theyrepresentthesourceoffinancingprovidedtothefirmbythecreditors.

EquityOwnershipistheowner'

sinvestmentsandthetotalearningsretainedfromthecommencementofthefirm.Equityrepresentsthesourceoffinancing

providedtothefirmbytheowners.

Balancesheetaccountsareclassifiedsothatsimilaritems