INCOME STATEMENT
BALANCE SHEET
Sales
Cost of Sales
Gross Profit
Operating Expenses
Operating Income
Adjustments
Net Interest Income (Exp)
Income Tax
Other Adjustments
Net Income
Receivables
Cash & Equivalents
Other Current Assets
Inventories
Fixed Assets
Current Liabilities
Long-Term Liabilities
Equity
DSO {{keyedReport.vf_21.value}} DAYS
30
60
90
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RATIOS
GLOSSARY
SCALE
SCALE
Sales
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Return on Sales
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Net Income
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Asset Turnover
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Return on Assets
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TOTAL Assets
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Cash & Equivalents
Cash on hand, in the bank, or otherwise very readily accessible.Cash drives the business!
What Do You Mean By That?
Cash is a
Current Asset : an asset that is "Cash or reasonably expected to be converted to cash within 12 months from the date of the Balance Sheet."
Current Assets include Cash, Receivables, and Inventories. Other forms of Current Assets include Short-term Investments and Prepaid Expenses.
Receivables
Money your customers owe to you. Part of Current Assets . Also called Accounts Receivables (A/R) or Debtors (outside North America).
What Do You Mean By That?
Current Assets
Receivables are
Current Assets : assets that are "Cash or reasonably expected to be converted to cash within 12 months from the date of the Balance Sheet."
Current Assets include Cash, Receivables, and Inventories. Other forms of Current Assets include Short-term Investments and Prepaid Expenses.
Finished Goods Inventory (FGI)
Fully produced goods which are available for sale to customers.Inventory .
What Do You Mean By That?
Inventories
The combined value of Raw Materials, Work-in-Process (WIP), and Finished Goods Inventory (FGI).
Current Assets
Inventories are
Current Assets : assets that are "Cash or reasonably expected to be converted to cash within 12 months from the date of the Balance Sheet."
Current Assets include Cash, Receivables, and Inventories. Other forms of Current Assets include Short-term Investments and Prepaid Expenses.
Work-in-Process (WIP)
Goods that are in the production stage, to be finished at some future date for shipment to customers.Inventory .
What Do You Mean By That?
Inventories
The combined value of Raw Materials, Work-in-Process (WIP), and Finished Goods Inventory (FGI).
Current Assets
Inventories are
Current Assets : assets that are "Cash or reasonably expected to be converted to cash within 12 months from the date of the Balance Sheet."
Current Assets include Cash, Receivables, and Inventories. Other forms of Current Assets include Short-term Investments and Prepaid Expenses.
Raw Materials
Materials purchased for manufacture, not yet altered by the production process. Inventory .
Inventories
The combined value of Raw Materials, Work-in-Process (WIP), and Finished Goods Inventory (FGI).
What Do You Mean By That?
Inventories
The combined value of Raw Materials, Work-in-Process (WIP), and Finished Goods Inventory (FGI).
Current Assets
Inventories are
Current Assets : assets that are "Cash or reasonably expected to be converted to cash within 12 months from the date of the Balance Sheet."
Current Assets include Cash, Receivables, and Inventories. Other forms of Current Assets include Short-term Investments and Prepaid Expenses.
Short-Term Investments
Marketable Securities (e.g. bonds and deposits) which are not included in Cash , but can be readily converted into cash.
What Do You Mean By That?
Current Assets
Short-Term Investments are
Current Assets : assets that are "Cash or reasonably expected to be converted to cash within 12 months from the date of the Balance Sheet."
Current Assets include Cash, Receivables, and Inventories. Other forms of Current Assets include Short-term Investments and Prepaid Expenses.
Prepaid Expenses
Expenses which have been paid in advance but have not yet been recorded as an expense.
What Do You Mean By That?
Current Assets
Prepaid Expenses are
Current Assets : assets that are "Cash or reasonably expected to be converted to cash within 12 months from the date of the Balance Sheet."
Current Assets include Cash, Receivables, and Inventories. Other forms of Current Assets include Short-term Investments and Prepaid Expenses.
Other
The accumulation of any Current Assets which is not detailed by individual class on the Balance Sheet . Notes to the Financial Statements for a full explanation (Notes are part of the Financial Report).
Property, Plant & Equipment (PP&E)
Tangible Assets such as land, buildings and machinery. These are Fixed Assets and are often combined into a single line-item on the Balance Sheet.
What Do You Mean By That?
Fixed Assets
Assets categorized as ‘permanent’ and not intended to be ‘turned over’ in the normal business cycle.
Fixed Assets may be tangible items such as land, buildings, equipment and furniture with a useful business life of greater than one year; or they may be intangible items such as Goodwill and Intellectual Property. Long-term Investments are also Fixed Assets.
Note: Some people define Fixed Assets to only include Tangible Assets. In this case there will be another grouping to describe Goodwill and Intellectual Property which are non-Tangible Assets.
Intangibles
Fixed Assets which have a perceived value but without a tangible nature. A typical example is Intellectual Property . Goodwill is an Intangible Asset but it is often broken out as a separate line item on the Balance Sheet.
Depreciation .
What Do You Mean By That?
Fixed Assets
Assets categorized as ‘permanent’ and not intended to be ‘turned over’ in the normal business cycle.
Fixed Assets may be tangible items such as land, buildings, equipment and furniture with a useful business life of greater than one year; or they may be intangible items such as Goodwill and Intellectual Property. Long-term Investments are also Fixed Assets.
Note: Some people define Fixed Assets to only include Tangible Assets. In this case there will be another grouping to describe Goodwill and Intellectual Property which are non-Tangible Assets.
Goodwill
An Intangible Asset that arises when a company is acquired and the purchase price is more than its ‘book value’. Goodwill is the difference between the purchase price and the Book Value of the purchased company's assets.Depreciation .
What Do You Mean By That?
Fixed Assets
Assets categorized as ‘permanent’ and not intended to be ‘turned over’ in the normal business cycle.
Fixed Assets may be tangible items such as land, buildings, equipment and furniture with a useful business life of greater than one year; or they may be intangible items such as Goodwill and Intellectual Property. Long-term Investments are also Fixed Assets.
Note: Some people define Fixed Assets to only include Tangible Assets. In this case there will be another grouping to describe Goodwill and Intellectual Property which are non-Tangible Assets.
Long-Term Investments
Long-term deposits, bonds and securities; they are not readily converted into cash.
What Do You Mean By That?
Fixed Assets
Assets categorized as ‘permanent’ and not intended to be ‘turned over’ in the normal business cycle.
Fixed Assets may be tangible items such as land, buildings, equipment and furniture with a useful business life of greater than one year; or they may be intangible items such as Goodwill and Intellectual Property. Long-term Investments are also Fixed Assets.
“What do you mean by that?” Some people define Fixed Assets to only include Tangible Assets. In this case there will be another grouping to describe Goodwill and Intellectual Property which are non-Tangible Assets.
Other
The accumulation of Fixed Assets which are not detailed by individual class on the Balance Sheet. Notes to the Financial Statements for a full explanation (Notes are part of the Financial Report).
Fixed Assets
Assets categorized as ‘permanent’ and not intended to be ‘turned over’ in the normal business cycle.
Payables & Accrued
Money you owe to your suppliers and vendors. Part of Current Liabilities . Also called Accounts Payable (A/P) , or Creditors (outside North America).
What Do You Mean By That?
Current Liabilities
Liabilities that are due within 12 months of the Balance Sheet date.
Current Liabilities include Payables and Short-term Debt (which includes the
Current Portion of Long-Term Debt .
Also known as Short-term Liabilities .
Short-Term Debt
The portion of Current Liabilities that is related to borrowing money (i.e. interest bearing bank loans) and is falling due within the fiscal year (or within the next 12 months).Current Portion of Long-term Debt which is coming due within the year.Also called Current Debt .
What Do You Mean By That?
Current Liabilities
Liabilities that are due within 12 months of the Balance Sheet date.
Current Liabilities include Payables and Short-term Debt (which includes the
Current Portion of Long-Term Debt .
Also known as Short-term Liabilities .
Other
The accumulation of Current Liabilities which are not detailed by individual class on the Balance Sheet.Notes to the Financial Statements for a full explanation (Notes are part of the Financial Report).
Long-Term Debt
The portion of Long-term Liabilities that is related to borrowing money (i.e. bank Loans). It is interest-bearing, and it is initially taken for a period greater than 1 year. Current Portion of Long-term Debt (i.e. that portion falling due within 12 months of the Balance Sheet date) is reclassified as Short-Term Debt because the repayment is an immediate concern.
What Do You Mean By That?
Long-Term Liabilities
The financial obligations of a company that are falling due more than one year in the future.
Long-Term Liabilities include Long-Term Debt and OPEB.
Pensions & Other Post-Employment Benefits (OPEB)
The long-term obligations to retired employees. This can include pensions, insurance and other benefits.
What Do You Mean By That?
Long-Term Liabilities
The financial obligations of a company that are falling due more than one year in the future.
Long-Term Liabilities include Long-Term Debt and OPEB.
Other
The accumulation of Long-Term Liabilities which are not detailed by individual class on the Balance Sheet.Notes to the Financial Statements for a full explanation (Notes are part of the Financial Report).
TOTAL Equity
The ownership the shareholders have in the company, represented by:
Capital Stock is the original investment in the company, plus any additional investment from outside the company; it does not include Retained Earnings.Retained Earnings is the accumulation of Net Income that has been retained in the company to help it grow. (The alternative is that the company paid it out to Shareholders as Dividends.)Treasury Stock is Shares which the Company has repurchased from Shareholders.Other is the accumulation of Equity which are not detailed by individual class on the Balance Sheet. What is included in 'Other' will vary by company--look at the Notes to the Financial Statements for a full explanation (Notes are part of the Financial Report).
Look at the Balance Sheet data to see how Equity is broken out into the different sources.
Balance Sheet Equation:
Total Assets = Total Liabilities + Equity
Also called Shareholders’ Equity or Net Worth .
Sales
Revenues from the sale of goods and services which are part of the company’s regular operations.What do you mean by that? The term ‘Sales’ generally refers to Net Sales which is the number used in the Financial Statements.Total Sales could refer to Gross Sales or Net Sales .
Cost of Sales (COS)
The Direct Cost of products and/or services provided to customers. COS typically includes raw materials and labor, it can also include individual components such as sales commission and Depreciation. This reporting varies on a company-by-company basis.variable cost because the cost reported varies with sales volume.Cost of Goods Sold or COGS .
Gross Profit
The amount of profit available after deducting from Sales the direct (variable) costs of labor and materials. Some companies will include the applicable overheads applied to the production of goods and services in their Direct Costs.
Gross Margin is the
Gross Profit as a
percentage of
Sales .
Selling, General & Administrative (SG&A)
The general expenses of running the business which are not associated directly with the products or services, i.e., the costs for sales and marketing, administration, recruitment and training and rent.
Operating Expenses (OpEx)
The after-COS expenses related to normal operation of the business including R&D, advertising, salaries, and rent. Operating Expenses do not include interest expense, taxes, and exceptional (one-time) charges.
Note: OpEx is an Operating Expense on the Income Statement. CapEx is a Capital Expenditure on the Balance Sheet.
The terms Overhead, Operating Expense, Indirect Costs, and Fixed Costs are very similar. Check how each term is used in your company.
Research & Development (R&D)
Expenses related to Research & Development. The R&D expense is sometimes included in SG&A or it can be broken out as a separate line-item on the Income Statement (this demonstrates the company is developing new products and services).
Operating Expenses (OpEx)
The after-COS expenses related to normal operation of the business including R&D, advertising, salaries, and rent. Operating Expenses do not include interest expense, taxes, and exceptional (one-time) charges.
Note: OpEx is an Operating Expense on the Income Statement. CapEx is a Capital Expenditure on the Balance Sheet.
The terms Overhead, Operating Expense, Indirect Costs, and Fixed Costs are very similar. Check how each term is used in your company.
Depreciation & Other
Non-cash expense (reported on the Income Statement) that expresses the reduction in economic value of a tangible Fixed Asset over time.Depreciation as part of COS/COGS (i.e. part of the Direct Costs); other companies record it as a line item in Operating Expenses .Depreciation ) on the Income Statement.
Operating Expenses (OpEx)
The after-COS expenses related to normal operation of the business including R&D, advertising, salaries, and rent. Operating Expenses do not include interest expense, taxes, and exceptional (one-time) charges.
Note: OpEx is an Operating Expense on the Income Statement. CapEx is a Capital Expenditure on the Balance Sheet.
The terms Overhead, Operating Expense, Indirect Costs, and Fixed Costs are very similar. Check how each term is used in your company.
Interest Income (Expense)
Companies can generate finance revenues, e.g. late fees paid by Customers, interest income from short-term investments, and foreign exchange gains, these are recorded as Interest Income.
Adjustments
Revenues and Expenses that are not part of the regular business operation. Look at the Notes to the Financial Statements for a full explanation (Notes are part of the Financial Report).
Income Tax
Taxes paid to government authority based on profits made by the company.
Other Adjustments
Revenues and Expenses that are not part of the regular business operation. Look at the Notes to the Financial Statements for a full explanation (Notes are part of the Financial Report).
Net Income
The Profit left for the owners, after all costs and expenses, including interest and taxes, have been paid.Calculation: Sales less all costs and expenses
