Financial Modelling #4: Income Statement, Balance Sheet and Cash Flow Statements (cont.d)

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Income Statement

The Income Statement is a record of the company's revenue and expenses over a specified period, usually a year. It is prepared from the income and expense accounts of the trial balance. The income statement is usually the first statement of the three (Income statement, Balance Sheet Statement and Cash Flow Statement) to be prepared from the trial balance. It is required to complete the Balance Sheet statement so even if you choose not to do the Income Statement first, you have to do it before the Balance Sheet. The reason is because the net income is always added to the Owner’s Equity in the Balance Sheet.
The common line items in the Income Statement are:
1.      Total Sales
2.      Cost of Goods Sold
3.      Gross Profit
4.      Selling, General and Administrative Expense
5.      Depreciation, Depletion and Amortization Expense
6.      Research and Development Expense
7.      Operating Profit
8.      Impairment
9.      Finance costs
10.  Income Tax Expense
11.  Other Gains
12.  Other Expenses
13.  Net Profit
Below is the Income Statement for Guinness Nigeria for years 2005 to 2015 (Guinness Nigeria’s financial year run from July to June). Also the figures are in thousands, so when you see 47,030.8 it is 47,030,800,000 Naira.

Balance Sheet Statement
The Balance Sheet Statement is the statement of the company’s financial position showing the company’s assets, liabilities and equity as of a point in time. This is usually at the end of at the company’s financial year (maybe 31 December). The Balance Sheet is so called because it strictly follows the accounting equation rule which states that assets must equal the sum of the liabilities and owner’s equity (balance out).
The common items in the Balance Sheet Statement are:
1.      Assets
a.      Cash and cash equivalents
b.      Accounts receivables
c.       Inventories
d.      Assets held for sale
e.      Property, Plant and Equipment (PPE)
f.        Intangible assets (patents, goodwill, trademarks, secret formulas)
g.      Other assets
2.      Liabilities
a.      Accounts payable
b.      Deferred tax liabilities
c.       Short-term loans
d.      Long-term loans
e.      Other liabilities
3.      Equity
a.      Capital stock
b.      Additional paid-in capital
c.       Retained earnings
Below is the Balance Sheet Statement for Guiness Nigeria for years 2005 to 2015 (Guiness Nigeria’s financial year run from July to June). Also the figures are in thousands, so when you see 243.2 it is 243,200,000 Naira.

Cash Flow Statement
Cash flow statement is the statement of the cash inflow (generated) and cash outflow (expended) by a company during a specified period (usually a year period). It accounts for all transactions of the company that affects the cash and cash equivalent balance. The statement is generally broken down into Cash Flow from Operating Activities, Cash Flow from Investing Activities and Cash Flow from Financing Activities.
The common items in the Cash Flow Statement:
1.      Cash from Operating Activities
a.      Net Income
b.      Depreciation, Depletion and Amortization
c.       Other Non-Cash Capital
2.      Cash from Investing
a.      Capital Expenditure
b.      Sale of Property, Plant and Equipment
c.       Cash Acquisitions
d.      Proceeds from Investment
e.      Divestures
f.        Investment in Marketable & Equity Securities
g.      Other Investing Activities
3.      Cash from Financing
a.      Short-term debt issued
b.      Short-term debt paid
c.       Long-term debt issued
d.      Long-term debt paid
e.      Preference Dividends paid
f.        Increase in Capital Stocks
g.      Decrease in Capital Stocks
h.      Special Dividend Paid
i.        Increase/Decrease in Deposits
j.        Increase/Decrease in Insurance Reserves
k.       Other Financing Activities

Below is the Cash Flow Statement for Guiness Nigeria for years 2005 to 2015 (Guiness Nigeria’s financial year run from July to June). Also the figures are in thousands, so when you see 9,874.4 it is 9,874,400,000 Naira.

1 comment:

  1. great work... pls can i get the sample excel file of the above financial statement


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