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THE FINANCIAL STATEMENTS AND THE FINANCIAL AUDIT, How to analyze financial…
THE FINANCIAL STATEMENTS AND THE FINANCIAL AUDIT
Balance sheet
It is made up
Liability Accounts
It is called the set of financial representations of the
Obligations contracted by the entity, which has undertaken, as a result of said commitments, to transfer economic resources to other entities in the future.
They may be
Passive in a short time
It consists of obligations that are conveniently expected to be settled in less than a year either through current assets or through the creation of a new Current liability such as: bank overdrafts, trade accounts payable or taxes payable.
Long-term liabilities
It consists of obligations that are reasonably expected to cancel in a period greater than one year.
Capital Accounts
It is the difference between liabilities and capital.
Asset Account
It is called the set of financial representations of economic resources, capital goods, and tangible and intangible values owned by the organization at a given date.
They may be:
Current assets
It is made up of cash and other assets that are expected to be converted into cash, sold or consumed during the year within the operating cycle, whichever is longer.
Non-current assets
It is made up of those financial representations or items whose objective is not to be sold, in the short term (one year) and which are carried out directly in the operation of the company.
Statement of income
It is made up
Net sales
It is represented by the total sales made by the company during the reference year of finished and semi-finished products, as well as by-products.
Sales cost
They are those that are incurred in the area that is responsible for taking the product from the Company to the last consumer.
Expenses
They are those reasonable expenditures that the company must incur in order to generate sales or income.
Cash flow
Consists in
Compare the beginning and end balances of a period considering that the increases in assets are an application of resources and the decrease is an origin or source of resources.
How to analyze financial statements
Through
Use of financial ratios
Liquidity ratios can be:
Net working capital
Solvency index
Acid test index
Reasons for indebtedness, can be:
Debt ratio
Capital liability ratio.
Profitability reasons can be:
Gross profit margin
Operating profit margin
Total asset turnover.
Reason for coverage, they can be:
Total coverage ratio
Total liability coverage
Times interest has been earned
Comparative method
When comparing two-period balance sheets
With different dates we can observe the changes obtained in the assets, liabilities and Equity of an entity in terms of money.
Análisis vertical y horizontal
The vertical analysis all the figures of a financial statement are expressed as a percentage of a figure of these. On the horizontal side, it is intended to analyze the behavior over time of the items in the financial statements.
ARISTNEL CISNEROS 9-745-1199