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3.0. Analyzing Balance Sheet - Coggle Diagram
3.0. Analyzing Balance Sheet
Usage and limitation
Usage
Pay for its near-term operating needs
Meet furture debt obligations
Make distributions to owners
Limitations
BS is mixed model with respect to measurement
Current value reflect the value at the end of the reporting period, not at the time analysis
Important aspects of a company's ability to generate furture CF are not included in its BS (reputation, skills, innovation,..)
Component
Current Assets:
Cash and cash equivalent
Marketable securities
Trade receivables
Inventory
Prepaid expense adn others
Current Liability
Trade payables: mua nợ hàng
Financial liabilities: nợ tài chính (vay banks)
Accrued expenses: chi phí chưa trả - dùng hàng rồi mà chưa trả tiền
Deferred income (unearned revenue): chưa gửi hàng mà nhận tiền rồi
Working capital = Current Asset - Current Liability
Non-current asset
Property, plant and equipment (PPE)
Investment property
Intangible assets
Goodwill
Financial assets
Deferred Tax Asset
Non-current Liability
Long-term financial liabilities
Deferred Tax Liabilities
Shareholders' equity
Capital contributed
Preferred shares
Retained earnings
Treasury shares
Accumulated other comprehensive income
Non-controlling interest
Financial assets measurement: Cách đo lường tài sản tài chính (chứng khoán, phái sinh...) éo phải là PPE á
Loại 1
GAAP: Held to Maturity (HTM)
IFRS: Amortized cost
Objective: Hold the asset to maturity
Measurement base: Amortized cost
Initial measurement: Fair value + Transaction cost
Dividends: N/A
Interest Income: Record in IS
Realized G/L: Record in IS
Unrealized G/L: N/A
Loại 2
GAAP: Available for sale securities (Debt only)
IFRS: Fair value through OCI (Equity is permitted if the company don't change this measurement)
Objective: both collect contractual CF and sell this asset
Measurement base: Fair value
Initial measurement: Fair value + Transaction cost
Dividends: GAAP: N/A - IFRS: IS
Interest Income: Record in IS
Realized G/L: Record in IS
Unrealized G/L: OCI
Loại 3
GAAP: Trading Securities (most of Equity here)
IFRS: Fair value through P&L
(an irrevocable election measurement - một phép đo bầu cử không thể hủy bỏ)
Objective: Not assigned to Held to Maturity and AFS
Measurement base: Fair value
Initial measurement: Fair value
Dividends: IS
Interest Income: Record in IS
Realized G/L: Record in IS
Unrealized G/L: IS
Common - size BL and ratios
Common-size
each item of BL as a percentage of TOTAL ASSETS
Ratios
Liquidity ratios
Current Ratios = Current Asset / Current Liabilities
Quick Ratio = (Cash + Marketable securities + Receivables)/ CL
Cash Ratio = (Cash + Marketable securities) / CL
Solvency ratios
Long term Debt to Equity = Total Long-term debt / Total equity
Debt to Equity = Total Debt / Total Equity
Total debt to Total asset = Total debt / Total asset