Income Statement

Revenue Amount
(-) COGS _ from Inv Schedule
Gross Profit
(-) SG&A
EBITDA
(-) Depreciation _ from FAS
EBIT
(-) Interest Exp _ from Debt Schedule
(+) Gain from Sale from Assets
(-) Loss from sale of an Assets
(+/-) Non-Operating Income/Expenses
PBT
(-) Tax
PAT

SG & A - Selling, General and Administration Expenses

Fixed Asset Schedule

Opening Balance Closing Balance of Last Year
(+) Purchase of aseets CFI
(-) Sale of assets CFI
(-) Depreciation and Amorti. Income Statement
Closing Balance = PPE of Balance Sheet

Dep & Amor. =%of (Opening+purchase-Sales)

 Balance Sheet
Liability
Equity
Equity Capital
Retained earnings

Borrowings
Short Term Loans
A/c payable
outstanding Expenses
Long term borrowings (From Closing Balance of Debt Schedule

Total

Retained Earnings = Closing balance of RE+PAT(This Year)-Div Paid

Debt Schedule
Opening Balance
(+) Debt Drawdown
(-) Debt Repaid
Closing Balance = Long Term Borrowings in BS

Int. Expense = % of (Opening Balance + Debt Drawdown) _ Int in exp in P/L

Inventory Schedule
Opening Schedule = Closing Balance of Last Year
(+) Purchases
(-) COGS = Income Statement
Closing Balance = Inventory of Balance Sheet
 Balance Sheet
Amount Assets
Cash _ from Closing Balance of CFS
Account Receivable
Inventory _ from inv schedule closing balance
Prepaid Expenses
PPE (From FAS) _ from FAS Closing Balance

Total

NCWC - Net Changes in working capital

Closing Balance of Last Year

CFF
CFF
Amount
 Cash Flow Statement
CFO
PAT _ IS
(+) Dep And Amortization _ IS
(+) Loss from sale of an asset _ IS
(-) Gain from sale of an asset _ IS
(+) Interest expenses _ IS
Changes in NCWC = Current Assets and Current Liabilities from BS
Total CFO

CFI
(-) Purchase of an asset _ from FAS
(+) Sale of an asset _ FAS
(+) Div Received
Total CFI

CFF
Changes in Equity Capital _ from BS Equity
Issue of shares
(-) buyyback of shares
(-) Div Paid _ Separately Calculated
(+) Debt Drawdown _ from Debt Schedule
(-) Debt Repaid _ from Debt Schedule
(-) Interest Expenses _ from IS
Total CFF
Cash Generated during the year = CFO+CFI+CFF

Closing Balance / Cash in Balance Sheet= Total Cash geberated during the year + opening
 Amount

ing the year + opening Balance

Inventory Evaluation Methods
LIFO
FIFO
Weighted Average

If cost is rising , what is the impact on following items

Using LIFO Using FIFO
1) COGS Higher Lower
2) Inventory Cost Lower Higher
3) Profit Lower Higher
4) CA/CL Lower Higher
5) COGS/Inventory Higher Lower
6) CFO No Impact No Impact

If cost is falling , what is the impact on following items

Using LIFO Using FIFO
1) COGS Lower Higher
2) Inventory Cost Higher Lower
3) Profit Higher Lower
4) CA/CL Higher Lower
5) COGS/Inventory Lower Higher
6) CFO No Impact No Impact
 IFRS
Using Weighted Average FIFO & Weighted Average

Using Weighted Average

USGAAP
FIFO, LIFO & Weighted Average
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which companies do have negative shares ? How can a share be negative ?
Revaluation costs
Revaluation Land
Valuations of investments (Marking to market)
Conservatism principle ?
Historical cost principle
cash basis of accounting and accrual basis of accounting
diffrence between provision and reserve

Dual aspect of the accounting ?

Matching Principle ?
Going Concern Concepts

Why does the trial balance match and if it matches, can there still be faults ?
Can you explain the rules of debit credit using an example ?
Golden rules
Deferred revenue and Account receivables
What are accrued expenses and how it affects the financial statements ?
Difference between Amortisation and Depreciation
What is Goodwill ?
Depreciation Tax Shield
Difference between staright line method and WDV method ?
in times of inflation, what will be the impact of using FIFO/LIFO and Weighted Average method on the
FIFO
LIFO
Weighted Average
What is Capitalising and Expensing ?
Capitalising is opposite to expensing
What are Preliminary Expenses ?
How do we balance the equation in balance sheet if we transfer our heavy expenses to fictitious asse
Revaluation Reserve
Revaluation Reserve

provisons are made before calculation of the profit and is the expense part of p/l, while reserve is tak
tax benefits
Assets = Liability + Capital (Accounting equation needs to be balanced), dual entry system
the relevant expenses should be matched with the relevant incomes of same accouting period
Permanent accounts, and temporary accounts
Nominal accounts are temporary accounts, real accounts are permanent accounts
because of the dual aspects concept, it is possible to have errors even after it matches, it is because o

Deferred Revenue - Current Liabilities , Account Receivalbles - Current Assets

depreciation is an accounting method of expensing the fixed asset during a financial year according to
Excess price over net asset value paid by aquirer to aquired company. / It is not amortised, it is impa
Depreciation Amount * Tax rate
Impact on tax sheild

Example - If we do heavy advertising then a lot of cost is involved, then we transfer some amount in
cial year. In case of intabgible assets, two types of intangible assets, 1 - finite life(patent, IPR's), 2- infinite life(G
nt, IPR's), 2- infinite life(Goodwill) - every year it gets its goodwill valued.
What does the income statement tell us ?
What is operating and non-operating incomes ?
What does the balance sheet tells us ?
What is shareholders equity ? (Net asset value, book value of equity, neth worth )
What is reserve and surplus ?
What does the cash flow statement tell us ?
How are the three statements are inter-linked ?
What is Deferred Tax Assets and Deferred Tax Liabilities ?
Deferred Tax Assets
Deferred Tax Liabilities
How do we balance Deferred Tax Asset and Liabilities in balance sheet ?
What is the difference between net profit and cash from operating activities ?

Is it possible to have high operating profit and low net profit and vice-versa?
What are the various sources of capital for a company ?
is equity good or debt good for a company ?
What is leverage and it's positive impact ?
what is Equity multiplier ?
What is internal and external funds ?
will you use internal funds or external funds to purchase new assets for the company ?
Internal Funding
External Funding

What is the difference between EBIT and EBIDTA ?

What is working capital and how do we calculate it ?
sppecific definition for financial analysis
it comprises of Equity share capital and Other equity i.e reserve and surplus.
it comprises of Equity share capital and Other equity i.e reserve and surplus., Revaluation reserve and

Direct linkage - Profit from P/L goes into BS and CFS, and after that tell indirect linkage
tell it based on methods of accounting as tax accounting is different from corporate accounts

Net Profit CFO

Accrual Basis
Operating and Non-operating activities
Non-Cash items (Dep and Amort.)

Equity and Debt

using loan to finance the company

No cost of acquisition

The difference between current assets and current liabilities. Funds which are used to run the busines
Current assets without considering the cash and current liabilities without considering the short term
we exclude short term debt because it goes in CFF
Revaluation reserve and security premium resrve

orate accounts

used to run the business on a day to day basis

idering the short term borrowings )
Why do we do ratio analysis ?
What are the differenet type of ratios ?
What is trend analysis ?
What is cross sectional analysis ?
what are the keyline items that you will look at in p/l ?
Which ratios you can calculate from P&L ?
What is solvency ?
How much ICR is good ?
Who are the stakeholders concerned about ICR?
What is the difference between ICR and DSCR ?
Name for loan conditions
what will you look in the balance sheet ?
what ratio can you calculate from balance sheet ?
What would you look at in cash flow statement ?
What ratios you can calculate using cash flow statement ?
what is earning per share and how is it calculated ?
What is ROE, ROCE, ROA and ROIC ?
What is debt to equity, debt to capital and equity multiplier ?
Difference between current ratio and quick ratio ?
What is Asset Turnover Ratio ?
What is PPETR ?
Working Capital turnover ratio ?
What is inventory turnover ratio ?
what is AR/AP turnover ratio ?
What is CCC (Cash Conversion Cycle) ?
Inventory Days + Receivable days = Gross operating Days
What is Price to Earning Ratio ?
What is the purpose and methodology of DUPONT analysis ?
to compare, for investors, company to industry peers, raw data do not give us a clear picture of liquid

comaparison of same company of previous and on same metric

compare two companies with industry average for same metric for a same accounting year
Bottom line and top line
gross profit margin, operating profit margin and net profit margin, ebidta margin and ebit margin, Inte
ability of business to repay it long-term business commitments

Covenants
Assets, Equity, Borrowings, current assets and liabilities
Solvency and liquidity ratios, current ratio, quick ratio, debt to equity ratio and financial leverage

Meaning < purpose < formula

it tells us on an average the entire inventory is converted into sales

time taken from the cash paid for inventory to the cash received form it's creditors
s a clear picture of liquidity, profitability, solvency of the company

ccounting year

rgin and ebit margin, Interest coverage ratio

nd financial leverage
 Liquidity Ratios
1 Current Ratio Current Assests/Current Liabilities
2 Quick Ratio Quick Assets / Current Liabilities

Efficiency/Turnover/ Activity Ratios

1 Inventory Turnover Ratio
2 AR Turnover Ratio
3 AP Turnover Ratio
4 Cash Conversion Cycle
5 PPE Turnover Ratio
6 Asset Turnover Ratio
7 Working Capital Turnover Ratio

Leverage Ratio / Solvency Ratios

1 Debt to Equity
2 Debt to Capital
3 Financial Leverage or Asset to Equity `- Equity Multiplier
4 Interest Coverage Ratio
5 Debt Service Coverage Ratio

Profitability Ratios
1 Gross Profit Margin
2 Net Profit Margin
3 Operating Profit Margin
4 Return on Asset
5 Return on Equity
6 Return on Capital Employed
7 c
8 DUPONT analysis

Valuation Ratios
1 Price to Earning
2 Price to Book Value
3 Dividend Payout Ratio
4 Enterprise Value
Liquidity ratios
current ratios
quick ratio

Activity Ratios
Inve
ARTR
APTR
CCC
ATR
ppe
wctr

Profitability
Liquidity Ratios
Current Ratio
Quick Ratio

Activity Ratios
Inventory T
Acc Re
Acc Pa
Cash
Asset Turnover
PPE Turnover
Working Capital

Leverage
Debt to Equity
Debt To Capital
Financial Leverage / Asset to Equity
Debt Service Coverage Ratio
Interest Civerage Ratio

Profitability
Gross Profit Margin
Net
Operating profit
Return on Capital
Return on Assets
retun on Equity
Return on Capital Emp
Return On Capital Invested
DUPONT NPM*RoA*Leverage

Valuation