1. Accounting Analysis
James Godrich
22/11/2018

2. What Will I Learn? Income Statement Balance Sheet Cash Flow Statement
Naughties

5. Gross Profit Cost of Goods Sold:
‘is the direct costs attributable to the production of the goods sold in a company. This amount includes the cost of the materials used in creating the good along with the direct labour costs used to produce the good. It excludes indirect expenses such as distribution costs and sales force costs.’
Source: Investopedia

6. Operating Profit Selling, General & Administrative Expense:
‘is reported on the income statement as the sum of all direct and indirect selling expenses and all general and administrative expenses (G&A) of a company. It includes all the costs not directly tied to making a product or performing a service.’
Source: Investopedia

7. Net Income

8. Income Statement

9. Balance Sheet

10. Balance Sheet Current Assets Non Current Assets = Current Liabilities
Non Current Liabilities +
Share Capital
Retained Earnings

11. Balance Sheet

12. Cash Flow Statement CFO – cash flow from day-to-day operations
CFI – cash flow from investment or disposal in assets
CFF – cash flow from company financing

13. Cash Flow Statement

14. What do we like?

15. And how do we measure it?
FCFF = CFO + Int(1-tax rate) - Capex

16. Berendsen

17. Naughties
Off BS Gearing (pension & leases) – are they hiding debt where I might not normally look?
Working Capital movements – is there any reason to be suspicious about WC?
Capex – has the asset base been underinvested?
Exceptionals – are exceptionals truly exceptional?