Need help regarding bal.sheet analysis

[PaklovesTurkiye]

@somebozo

 

[somebozo]

@somebozo

Sorry I saw this thread last night but I am not an accountant..I will ask my accountant on sunday to help you.

 

[Sugarcane]

Hello guys, i need help regarding analysis of Balance sheet (vertical analysis and horizontal analysis), please elaborate in detail how so far company is comparatively in 2014 and 2015. Good/progressing or suffering loss, what does it mean/imply by decreasing non current liabilities? company profitable or not? what does it mean if 78% of finances are covered by equity (like in this case)? Step by step elaboration of both analysis will be very helpful.......THANKS.

file:///C:/Users/4STAR~1/AppData/Local/Temp/Rar$EXa0.650/Horizontal%20Analysis%20BL.html

file:///C:/Users/4STAR~1/AppData/Local/Temp/Rar$EXa0.258/VERTICAL%20ANALYSIS%20Balance%20Sheet.html

These files are invalid.......scroll down for data observation....

Ask PDF's glorified munshi @Armstrong

 

[Armstrong]

Ask PDF's glorified munshi @Armstrong

I'm retired...

 

[ito]

I can help you but can you ask specific questions?. Also you seem to have a Balance Sheet that combines a lot of items into generic items such as current assets. Showing what goes into Current assets will help in understanding the financial position of the company better.

 

[Lavrentiy]

Hello guys, i need help regarding analysis of Balance sheet (vertical analysis and horizontal analysis), please elaborate in detail how so far company is comparatively in 2014 and 2015. Good/progressing or suffering loss, what does it mean/imply by decreasing non current liabilities? company profitable or not? what does it mean if 78% of finances are covered by equity (like in this case)? Step by step elaboration of both analysis will be very helpful.......THANKS.

file:///C:/Users/4STAR~1/AppData/Local/Temp/Rar$EXa0.650/Horizontal%20Analysis%20BL.html

file:///C:/Users/4STAR~1/AppData/Local/Temp/Rar$EXa0.258/VERTICAL%20ANALYSIS%20Balance%20Sheet.html

These files are invalid.......scroll down for data observation....

For Vertical Analysis of the Balance Sheet, you need to divide every item by the total assets and multiply it with 100 to express it as a percentage. Vertical analysis represents all items of the balance sheet as percentage of total assets. Remember that total assets is one of the items so it too would be divided by itself to give a value of 100%


For Vertical Analysis of the Income Statement, you need to divide every item by the Net Sales (or Sales) and multiply it with 100 to express it as a percentage. Vertical analysis represents all items of the income statement as percentage of sales. Remember that Sales is one of the items so it too would be divided by itself to give a value of 100%

 

[ito]

For Vertical Analysis of the Balance Sheet, you need to divide every item by the total assets and multiply it with 100 to express it as a percentage. Vertical analysis represents all items of the balance sheet as percentage of total assets. Remember that total assets is one of the items so it too would be divided by itself to give a value of 100%


For Vertical Analysis of the Income Statement, you need to divide every item by the Net Sales (or Sales) and multiply it with 100 to express it as a percentage. Vertical analysis represents all items of the income statement as percentage of sales. Remember that Sales is one of the items so it too would be divided by itself to give a value of 100%

He already did it. You can see that in files he uploaded.

 

[Lavrentiy]

He already did it. You can see that in files he uploaded.

Does he want an interpretation then? I perform fundamental analysis for my stock market investments. I wish I had the time to look deeply into these statements. Busy these days.

Is this some academic assignment or some professional-level work?

 

[ito]

Does he want an interpretation then? I perform fundamental analysis for my stock market investments. I wish I had the time to look deeply into these statements. Busy these days.

Seem a simple exercise. I guess he wants how much growth in net worth in those two years, sources of that growth, may be some ratio analysis and a bit of analysis on working capital. Anyways he did not uploaded the income statement, so cannot find the profitability of the company

 

[Lavrentiy]

Can the OP upload all the data (preferably in excel)? I don't seem to see any data in this thread.

You said 78% of the capital structure is made of equity financing. Thus 22% has been financed through debt. This means that the company have very little leverage. A low financial leverage would imply lower risk but also lower returns.

Debt is a double edged sword. Debt has a fixed cost (interest); thus, when operating income increases by 10% for example, the Return on Equity (ROE) increases more than 10% while the Return on Assets will increase by the same 10%. In simple words, this means that share holders will get higher returns.
However, if the operating income starts decreasing, the ROE will suffer more because of the fixed cost of debt. Thus, the higher risk for the shareholders.
------------------
You said that the non-current liabilities have gone down. If these are long term debts, then it may be the case that some debt has been retired. Financial leverage may have gone down from the previous year.

P.S: I cannot give a qualified response without seeing the data.

 

[PaklovesTurkiye]

Can the OP upload all the data (preferably in excel)? I don't seem to see any data in this thread.

You said 78% of the capital structure is made of equity financing. Thus 22% has been financed through debt. This means that the company have very little leverage. A low financial leverage would imply lower risk but also lower returns.

Debt is a double edged sword. Debt has a fixed cost (interest); thus, when operating income increases by 10% for example, the Return on Equity (ROE) increases more than 10% while the Return on Assets will increase by the same 10%. In simple words, this means that share holders will get higher returns.
However, if the operating income starts decreasing, the ROE will suffer more because of the fixed cost of debt. Thus, the higher risk for the shareholders.
------------------
You said that the non-current liabilities have gone down. If these are long term debts, then it may be the case that some debt has been retired. Financial leverage may have gone down from the previous year.

P.S: I cannot give a qualified response without seeing the data.

Oh, sir......I can't thank you enough.....I got it. You hit the mark.

Seem a simple exercise. I guess he wants how much growth in net worth in those two years, sources of that growth, may be some ratio analysis and a bit of analysis on working capital. Anyways he did not uploaded the income statement, so cannot find the profitability of the company

Thank you for your time to see the thread. I got it what i needed from pdf and other friends. Thank you.

Does he want an interpretation then? I perform fundamental analysis for my stock market investments. I wish I had the time to look deeply into these statements. Busy these days.

Is this some academic assignment or some professional-level work?

Academic assignment....

 

[Lavrentiy]

Oh, sir......I can't thank you enough.....I got it. You hit the mark.

As the income statement isn't here, do check whether the increase in equity has been due to increase in retained earnings or due to new issue of shares.

 

[PaklovesTurkiye]

Sorry I saw this thread last night but I am not an accountant..I will ask my accountant on sunday to help you.

Oh no sir, no need for that. I got what i wanted. Thank you.

 

[Lavrentiy]

Oh, sir......I can't thank you enough.....I got it. You hit the mark.



Thank you for your time to see the thread. I got it what i needed from pdf and other friends. Thank you.



Academic assignment....

Any time my friend. You are welcome.

 

[PaklovesTurkiye]

As the income statement isn't here, do check whether the increase in equity has been due to increase in retained earnings or due to new issue of shares.

due to increase in retained earnings....

Any time my friend. You are welcome.

A question......

what is deferred tax liability?

Deferred tax liability arising due to accelerated tax depreciation allowance, deferred tax asset arising in respect of provisions

In layman words, what does the above bold line means?