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Interpreting Financial Statements - Coggle Diagram
Interpreting Financial Statements
1. Management Commentary
Objective
Provide understanding of management's objectives & strategies
Provide additional information
Principles
Management's view
Supplement/complement financial statements
Definition
Narrative or disclosure related to the financial statements
Elements
Performance measures and indicators
Operational results and prospects
2. Integrated Reporting
Objectives
Support decision making
Improve quality of information
Principles
Capital
Human
Manufactured
Financial
Social & relationship
Natural
Intellectual
Value creation
Definition
Integrated thinking of value creation
Elements
Business model
Risk & opportunities
Governance
Performance
Strategic focus
3. Non-Financial Reporting
Social Reporting
Environmental Reporting
4. Financial Performance Measures
Financial performance
Efficiency
Asset turnover
Investor related
Earnings per share
Price to earnings ratio
Profitability
Gross profit margin
Net profit margin
Return on equity
Financial position
Working capital management
Inventory holding period
Receivables collection period
Payables payment period
Financial leverage
Gearing ratio
Liquidity
Current ratio
Acid-test ratio
5. Alternative Performance Measures
Contents
Context of calculation
Type of APM used
Basis of calculation
Advantages
More flexible to measure
Definition
Financial measure other than IFRS
Disadvantages
Inconsistent
Management bias