Transcript: Income Statement Reports on the profitability of a company. 2 Main Parts Revenue Sale to customers over a period of time. Expenses The costs associated with doing business over the time period that revenues were earned. Rent/Mortgage Telephone Hydro Advertising Bank Charges Salary Supplies Maintenance Revenues - Expenses = Net Income (or Net Loss) R- E = NI Net Income Revenue Expenses
Transcript: O F I N C O M E STATEMENT OF COMPREHENSIVE INCOME STATEMENT OF CHANGES IN EQUITY STATEMENT OF FINANCIAL POSITION STATEMENT OF FINANCIAL POSITION STATEMENT OF CASH FLOW FINANCIAL STATEMENT S T A T E M E N T STATEMENT OF CHANGES IN EQUITY
Transcript: Income Statement 1- The operating performance of a business firm has traditionally been measured by its success in generating earnings—the “bottom line.” Introduction 2- The income statement summarize to us how a company arrives at its “bottom line.” 3- The income statement, also called the statement of earnings 4- Investors, creditors, and analysts eagerly await companies’ earnings reports. 5- Annual reports include three years of income statements and stockholders’ equity information. Companies make income statement every quarter or year. 6- Earnings are measured on an accrual rather than a cash basis, which means that income reported on the income statement is not the same as cash generated during the accounting period. 7- The income statement comes in two basic formats Multiple-step Format Single-step Format Mr. Haridy Company for Real Estate Common size financial statements 1- Useful analytical tool to compare firms with different levels of sales or total assets 2- Facilitate internal or structural analysis of a firm 3- Evaluate trends , make industry comparisons Common size financial statements Common size income statement 1- Expresses each income statement item as a percentage (%) of net sales 2- It also shows the relative magnitude of various expenses relative to sales ,Profit percentages (%) such as ( gross profit , operating profit , net profit margins ) ,The relative importance of " other " revenues & expenses Common size income statement Net Sales 1- Sales are the major revenue source for most companies Net Sales 2- Total sales revenue for each year of the three-year period is shown ( Sales return and Sales allowance ) 3- When a company's sales are increasing ( or decreasing) , It's a result of price , volume , or a combination of both. Nominal VS Real A related issue is whether sales are growing in “real” (inflation-adjusted) as well as “nominal”(as reported) terms. The change in sales in nominal terms can be readily calculated from the figures reported on the income statement. To adjust sales in income statement from nominal to real we use Consumer price index ( CPI), Which will enable the analyst to make a comparison of the changes in real and nominal terms. To make the calculation to compare real with nominal sales,begin with the sales figures reported in the income statement, and adjust years prior to the current year with the CPI or some other price index. Example: Assuming the CPIs for 2013 and 2012 are 207.3 and 201.6, respectively The adjusted or real sales figure for 2012= (207.3/201.6) * $153,000= 157,326 The nominal growth rate= 40.9%, While Real growth rate= 37% COGS Cost of goods sold 1 - The first expense deduction from sales is the cost to the seller of products or services sold to customers. 2 - The amount of cost of goods sold will be affected (For any accounting period) by the cost flow assumption used to value inventory. The cost flow assumption are ( LIFO, FIFO, Weighted Average ). 3 - The relationship between cost of goods sold and net sales are called the cost of goods sold percentage it is important for profit determination. Gross Profit Gross Profit 1- The difference between net sales and cost of goods sold is called gross profit or gross margin. 2- Gross profit is the first step of profit measurement and is generating after deducting the cost of products or services sold. 3- If the cost of the good sold percentage increase or decrease, this doesn't mean that costs have increased or decreased, the change may caused by decrease or increase in the selling price. 4- The Cost of goods sold and gross profit are complementing each other. generally firms want to maintain the relationship between gross profit and sales Formula Net Sales Cost of Goods Sold Gross Profit = - Operating Expense 1-Selling and administrative expense 2-Advertising expense 3-Impairment charges 4-Depreciation and amortization expense 5-Lease Payments (rent expense) 6-Repair and maintenance expense Operating Expense Selling and administrative 1- Selling and administrative Expense: They are expenses relating to the sale of products or services and to the management of the business . Selling and administrative expenses include: (Salaries, rent, insurance , utilities, supplies ) Advertising Expenses 2- Advertising expenses Advertising costs are expense major in the budgets of companies as marketing is an important element of success Ratio of advertising expenses = Advertising / Net Sales Examples: costs for setting up business website, costs of T.V and radio advertisements and costs of business cards. Impairment Charges 3- Impairment charges They are the expenses recognized to record a decline in a value of a long term asset . Impairment charges may occur in connection with goodwill , when the book value of goodwill exceeds the fair value then book value must be written as impairment charges Lease Payments 4- Lease payments (Rent expenses) Lease payments include the costs associated with operating rentals of
Transcript: ANJE ROSE R. LAMES TRAINING METHODOLOGY 1 TRAINEE'S ORIENTATION TRAINEE'S ORIENTATION DEC 8, 2017 BUKAL SUR NATIONAL HIGH SCHOOL, CANDELARIA, QUEZON ANJE ROSE R. LAMES TRAINER Schol Profile DEPeD VISION, MISSION AND CORE VALUES Schol Profile DEPeD VISION, MISSION AND CORE VALUES Bukal Sur National High School is one of the leading schools in t... BSNHS offers FOOD AND BEVERAGE SERVICES NC II and COOKKERY NC II duly accredited by the Technical Education and Skills Development Authority (TESDA). Bukal Sur National High School is one of the leading schools in the province of Quezon. It is located at Buenavista West, Candelaria, Quezon. SCHOOL IMAGES SCHOOL IMAGES The DepEd Vision The DepEd Vision We dream of Filipino who passionately love their country and whose values and competencies enable them to realize their full potential and contribute meaningfully to building the nation. As a learner-centered public institution, the Department of education continuously improves itself to better serve its stakeholders DEPeD MISSION DEPeD MISSION -To protect and promote the right of every Filipino to quality equitable, culture-based, and complete basic education where: - Student learn a child-friendly, gender sensitive, safe and motivating environment - Teachers facilitate learning and constantly nurture every learners - Administrators and staff as stewards of the institution, ensure an enabling and supportive environment for effective learning to happen - Family, community, and other stakeholders are actively engaged and share responsibility for developing life-long learners EFFECTIVENESS and EFFICIENCY The school is committed to provide effective instruction to the students and efficient service to its clientele. ACCOUNTABILITY The school is expected to be responsible in making decisions and actions that will be beneficial to the students and other stakeholders. DEPeD CORE VALUES DEPeD CORE VALUES House Rules House Rules ALL ABOUT CBT CBT PROCESS FLOW Competency-Based Training Why competency-based approach? 10 Principles of CBT Roles of Trainer and Trainees CBT CASHFLOW CBT CASHFLOW Competency- Based Training Competency- Based Training CBT is a training delivery approach that focuses on the development of competence in the learner as a result of the training. Why competency-based approach? Why competency-based approach? Education and training must keep pace with technology and customer requirements. 10 Principles of CBT 10 Principles of CBT Principles of CBT Principles of CBT cont.. cont.. cont.. cont.. cont.. cont.. Roles of Trainer and Trainees Roles of Trainer and Trainees -Motivator -Facilitator (facilitate learning) -Interact with trainees -Serves as a model for desirable work habits attitudes, & task performance in the occupational field. -Evaluates students achievement/ progress -Solve learning problems. Trainer Trainer -Trainees may request to receive credit for what they already know. This is done either through pre-testing or through a review of a task completed at another training site. -Selects what they want to learn and when they want to learn. -Compete against prescribed standards not against other students. -Trainees spends most of his/her time in directed self-study and practice, supervised by the trainer who can provide immediate assistance and feedback TRAINEE TRAINEE Work out lay-out Monitoring Tools Evaluation System Four Dimensions of Competency Work out lay-out Monitoring Tools Evaluation System Four Dimensions of Competency Work out lay-out Work out lay-out Monitoring Tools Monitoring Tools Training Activity Matrix Training Activity Matrix Achievement Chart Achievement Chart Progress Chart Progress Chart Trainee’s Record Book (TRB) Trainee’s Record Book (TRB) Evaluation System Evaluation System Competent (C) Competent (C) Not Yet Competent (NYC) Not Yet Competent (NYC) Four Dimensions of Competency Four Dimensions of Competency Task Skills Task Skills Task Management Skills Task Management Skills Contingency Management Skills Contingency Management Skills Job/Role Environment Skills Job/Role Environment Skills BOOKKEEPING NC III BOOKKEEPING NC III Core Competency Core Competency UNIT OF COMPETENCY: PREPARE FINANCIAL REPORT MODULE TITLE: PREPARE FINANCIAL REPORT UNIT DESCRIPTOR: This unit covers the knowledge, skills, and attitudes in preparing financial reports manually. Nominal hours 248 hours UNIT OF COMPETENCY: PREPARE FINANCI... Learning Outcomes Learning Outcomes LO1. Prepare Financial Statement LO1. Prepare Financial Statement LO2. Analyze Financial Statement LO2. Analyze Financial Statement Prepare Income Statement Prepare Income Statement Be sure to do the job as follows: Be sure to do the job as follows: Prepare Materials needed. Prepare Materials needed. Materials Materials Steps /Procedures Steps /Procedures Step 1: Start by making the heading Step 1: Start by making the heading Step 2: Report all the revenue accounts Step 2: Report all the revenue accounts Step 3: Report all expense
Transcript: INCOME STATEMENT Definition and Usefulness income statement: is the report that measures the success of company operations for a given period of time. Usefulness of the Income Statement: 1. Evaluate the past performance of the company 2. Provide a basis for predicting future performance. 3. Help assess the risk or uncertainty of achieving future cash fl ows. Limitations Limitations of Income Statement 1. Companies omit items from the income statement that they cannot measure reliably. 2. Income numbers are affected by the accounting methods employed. 3. Income measurement involves judgment. FORMAT OF INCOME STATEMENT multiple-step income statement single-step income statement Elements of Income Statement OPERATING SECTION. A report of the revenues and expenses of the company’s principal operations. Sales or Revenue Section. A subsection presenting sales, discounts, allowances, returns, and other related information. Cost of Goods Sold Section. A subsection that shows the cost of goods that were sold to produce the sales. Selling Expenses. A subsection that lists expenses resulting from the company’s efforts to make sales. Administrative or General Expenses. A subsection reporting expenses of general administration. NON-OPERATING SECTION. A report of revenues and expenses resulting from secondary or auxiliary activities of the company. Other Revenues and Gains. A list of the revenues recognized or gains incurred, generally net of related expenses, from non-operating transactions. Other Expenses and Losses. A list of the expenses or losses incurred, generally net of any related incomes, from non-operating transactions. INCOME TAX. A section reporting federal and state taxes levied on income from continuing operations.
Transcript: Income Statement or P&L Review The gains or losses includes both realized and realized amounts airising from the traslation of foreing currency. General and administrative expenses Nov 2014 REVENUE FX Income Statement or P&L , Income Statement or P&L Income Statement or P&L Costs incurred by businesses in their ordinary course of business. Costs that are directly associated with a particular business. Income Statement or P&L Income Statement or P&L Interest expense COSTS OF SALES Amounts billed or to be billed to customers as a result of the delivery or production of electricity, rendering of services, or other activities, Includes interestaccrued on debt and the amortization of deferring financing costs as well as interest on accounts payable. All operating expenses of entities whose purpose is of an overhead nature and are thus identified as "G&A".
Transcript: Performance of the company Cash Flow Statement: The child of the Income Statement and the Balance Sheet Usefulness of the Income Statement Conclusion FASB Curious Approach Ethical Issues 1. Intermediate Accounting, 18e, Earl K. Stice and James D. Stice (Pages 4-3, 4-4, 4-16, 5-4). 2. FASB 230-10-1, FASB 225-10-S99, FASB 225-10-15, and FASB 230-10-15. 3. http://www.oed.com/view/Entry/99053?redirectedFrom=investor#eid 4. http://www.oed.com/view/Entry/99052?redirectedFrom=investment 5. Financial Accounting Theory and Analysis: Text and Cases, 10th edition, Richard G. Schroeder; Myrtle W. Clark; Jack M. Cathey (pages 235 and 238). In today’s complex accounting world, the information provided by the income statement (please refer to FASB 225-10-S99) is more relevant than the information provided by the statement of cash flows. The performance and profitability of a company are of highly importance for any investor. The usefulness of the comparative financial statements, all the different income statement accounts and the pro-forma income statements provide sound information in which investors can rely on. Furthermore, the information found in a cash flow statement could be transferred from a balance sheet and an income statement, thus rendering the cash flow statement as irrelevant or of minor importance. Present arguments that the income statement, not the statement of cash flows, is the most important financial statement to prospective investors. Income Statement of Cash Flows Investor Investment A Presentation about the Income Statement Understanding Terms Pro-Forma Income Statement References Importance of the Income Statement When net income does not give us an accurate picture of the economic performance of a company Manipulation of Income Statement Accounts FASB 225-10-15 Scope and Scope exception: “The guidance in the Income Statement Topic applies to all entities.” FASB 230-10-15 Scope and Scope exception: “The guidance in the Statement of Cash Flows Topic applies to all entities…with specific exceptions…” Debate 7 -1
Transcript: 1) Investing in Captial Expenditures 2013 1) Net Sales Outside Factors A&F vs Victoria's Secret 2) Other Investments Treasury Stock (In Thousands) Income Statement Restructuring Charges (in thousands) 2013 2012 2011 Income Statement 2011 2012 Cash decreased by $43,000,000, but inventory increased by more than $103,000,000. Investing Acts (In Thousands) Statement of Cash Flows 2) Purchase of Common Stock 2. "Abercrombie would rather burn clothes than give them to poor people" 1. Mike Jeffries, CEO 2013 The company’s performance regarding the current ratio improved. 1 Cash Income Statement Current ratios for 2013 and 2012 were 2.3204 and 1.893, respectively 2) Net Income CURRENT RATIO (In Thousands) Financing Acts (In Thousands) Comparison Balance Sheet Outside Factors 2012 2013 2012 2011 1) Proceeds from Borrowings Statements of Cash Flows Reduction in current liabilities by a total of $122,579,000
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