학습러의 라이브러리

Reading 25. Understanding Cash Flow Statements

a. compare cash flows from operating, investing, and financing activities and classify cash flow items as relating to one of those three categories given a description of the items. (page 90)

1. CFO

- Interest, *dividends received

- Interest, Tax Paid

- trading securities 매매 손익

2. CFI

- fixed assests, debt, equity 투자

- loans

3. CFF

- stock, debt issuing

- *dividends paid

b. describe how non-cash investing and financing activities are reported.(page 91) 

Noncash investing and financing activities

- 자금조달해서 투자자산 매입하는 것처럼 현금없이 바로 전환이 이뤄지는 활동 (ex전환사채)

- must be disclosed

c. contrast cash flow statements prepared under International Financial Reporting Standards (IFRS) and US generally accepted accounting principles (US GAAP). (page 92)

US GAAP vs IFRS

IFRS가 판단이 더 많이 요구됨

d. distinguish between the direct and indirect methods of presenting cash from operating activities and describe arguments in favor of each method. (page 92)

CFO에서 직접법 간접법 구별 

Direct method

- Cash base I/S와 유사함

- 더 많은 정보

Indirect method

- Net income에서 시작해서 noncash expenses, nonoperating items 등 조정

- Net income과 CFO의 차이를 부각 (useful link)

Disclosure

- US GAAP의 경우 direct method를 쓰면, 결국 Indirect method와 같은정보를 추가로 공시해야함 (direct method를 장려하지만, 실제적으로 잘 안쓰이는 이유)

e. describe how the cash flow statement is linked to the income statement and the balance sheet. (page 94)

- Cash = NI + Bond + Equity - Asset

- 자본, 부채의 증가는 Cash의 증가, Asset의 증가는 Cash의 감소라고 생각

f. describe the steps in the preparation of direct and indirect cash flow statements, including how cash flows can be computed using income statement and balance sheet data. (page 97)

Direct method

- Cash collected from customers

- Cash used in the production of goods

- Cash paid for tax

- 위와 같이 현금을 어디에 사용했는지 상세히 적혀있으면 Direct, 그래서 더 많은 정보

Indirect method Step

CFO

1. Net income에서 시작

2. Add back all noncash charges (depreciation, amortization)

3. Operating과 관련 없는 손익 제거 (land 판매 수익, building 판매 수익)

4. Balance sheet 항목 변화 된 것 반영 (발생주의 회계로 인해 실제 I/S와 C/F의 차이를 B/S에서 조정하는 작업)

Cash = -자산변화량 + 부채변화량 + 자본 변화량 (단, Operating과 관련있는 것만)

p100 example 참고

g. convert cash flows from the indirect to direct method. (page 105)

CFO

1. Cash collection (Sales - dA/R)

- *Sales를 사용한다는 것 주의

- 고객으로부터 벌어들이는

- A/P는 supplier로부터

2. Operating과 관련된 Cash 항목 I/S와 B/S의 변화에서 가산

h. analyze and interpret both reported and common-size cash flow statements. (page 108) 

- percentage of revenue (Sales)

i. calculate and interpret free cash flow to the firm, free cash flow to equity, and performance and coverage cash flow ratios. (page 110) 

FCFF = NI + NCC - WCinv - FCinv + int(1-t)

= CFO - FCinv + int(1-t)

NCC = noncash charges

WCinv= Working Capital investment (cash paid - received)

FCinv = Fixed Capital investment (cash paid - received)

- 기업의 주주, 채권자 등 이해관계자 모두가 사용할 수 있는 CF를 구하는데 목적

- 그래서 Int(1-t)를 가산해줌

FCFE = CFO - FCinv + net borrowing

net borrowing = cash received - paid

- 주주가 사용할 수 있는 CF를 구하는데 목적

- 채권 발행 등의 자금조달을 통한 CF도 사용할 수 있기 때문에 net borrowing을 가산해줌

C/F ratio

Performance ratios

-분자는 모두 CFO 사용

1. cash flow-to-revenue = CFO / revenue

2. cash return-on-asset = CFO / avg total asset

3. cash return-on-equity = CFO / avg total equity

4. cash-to-income ratio = CFO / operating income

5. Cash flow per share = CFO - preferred div / weighted avg shares

Coverage Ratios

1. debt coverage = CFO / debt

2. interest coverage = CFO + interest paid + tax paid / interest

3. reinvestment ratio = CFO / long-term assets paid

4. debt payment ratio = CFO / long-term debt paid

5. dividend payment ratio = CFO / dividends paid

6. investing and financing ratio = CFO / cash outflow form CFI, CFF

Reading 24. Understanding Balance Sheets

a. describe the elements of the balance sheet: assets, liabilities, and equity. (page 65)

b. describe uses and limitations of the balance sheet in financial analysis. (page 66)

활용 

- 기업의 liquidity, solvency등을 평가하는데 사용

- liquidity : ability to meet short-term obligations

- solvency : ability to meet long-term obligations

한계 : 

- 시장가치, 내재가치 반영 x

- reputation 등 무형가치 반영 x

c. describe alternative formats of balance sheet presentation. (page 66)

classified balance sheet

- IFRS, US-GAAP 모두 사용

- current, noncurrent로 나눔

liquidity-based format

- IFRS 에서만 사용

- 유동성 순으로 나열(Cash, MS, A/R...), 주로 은행에서 사용

d. distinguish between current and non-current assets and current and non current liabilities. (page 67)

 Current assets & liabilities

- within 1 year or 1 operating cycle (whichever greater)

NonCurrent assets & liabilities

- firm's investing activities

- firm's long-term financing activities

e. describe different types of assets and liabilities and the measurement bases of each. (page 68)

Current Assets

1. Cash and cash equivalents

- T-bills, CP, MMF 등

2. Marketable securities : 단기투자자산

- T-bills, notes, bonds, equity securities

3. Accounts receivable : 매출채권

- net realizable value

- allowance for doubtful accounts : 대손충당금

A/R이 회수 불가능하다고 여겨지는 금액을 빼주기위함, Bad debt exp로 I/S계정에서 비용인식

4. Inventories

- lower of cost or NRV(Net Realizable Value) : IFRS

- lower of cost or market(replacement cost) : US GAAP

- write down(IFRS, US GAAP)

- write up(IFRS)

5. Other current assets

- Prepaid expense : 선급금, paid in advance, 선 현금지급, 후 비용인식

- deferred tax assets

Current Liabilities

1. Accounts payable : 매입채무

2. Notes payable, current portion of long-term debt(만기가 1년 이내로 도래한 장기차입금)

3. Accured liabilities : 미지급부채

- 연말에 10,000원 비용 지불해야 한다면, 1분기에 2,500원을 Accured liabilites에 잡는개념, 실제로 돈이 나간 것이 아니기 때문에 부채로 잡음

- taxes payable, interest payable, wages payable

- 선 비용인식 , 후 현금지급

4. Unearned revenue : 미수수익

- 수익 인식 전에 현금이 먼저 들어온 경우 이후에 현금에 해당하는 만큼 자산을 내줘야하기 때문에 부채로 인식

- deferred revenue, deferred income

-선 현금수령, 후 수익인식

Noncurrent Assets and Liabilities

1. PPE(Property, Plant and equipment)

- cost model (IFRS, US GAAP) and revaluation model (IFRS)

2. Investment property (IFRS만 사용)

-  cost model and fair value model

3. Intangible assets

- cost model (IFRS, US GAAP) and revaluation model (IFRS)

- research cost & development cost (US GAAP)

- research cost & development cost or capitalize (IFRS)

- impairment test annually

Good will = purchase price - fail value of net assets

- 그 기업의 자본의 시장가치보다 더 비싸게 산 금액으로 측정됨

- 내용연수 없지만, *손상 여부 test annually

Marketable securities

1. trading sec

 - Fair value

 - 가치변동 I/S에 반영

2. available for sale sec

 - Fair value

 - 가치변동 AOCI로 B/S에 반영

3. held to maturity sec

 - amortized cost

 - 가치변동 만기까지 인식 안함

f. describe the components of shareholders' equity. (page 76)

1. Paid-in capital

 (1) Contributed capital = issued capital

  - common stock

  - preferred stock

(2) Additional paid in capital

2. Retained earnings

3. Accumulated other comprehensive income

4. Treasury stock : 자사주

 - Authorized shares(최대 발행가능주식수) = Issued shares + unissued shares

 - Issued shares(발행주식수) = outstanding shares(유통주식수) + treasury stock(자사주)

5. Non-controlling interest : 비지배 지분

g. convert balance sheets to common-size balance sheets and interpret common-size balance sheets. (page 78)

- percentage of total assets

- eliminate size effects

h. calculate and interpret liquidity and solvency ratios. (page 80)

Liquidity ratios

- current ratio

- quick ratio

- cash ratio

Solvancy ratios

- long-term debt-to-equity

- total debt-to-equity

- debt ratio

- financial leverage

STUDY SESSION 7

Reading 23. Understanding Income Statements

a. describe the components of the income statement and alternative presentation formats of that statement. (page 28)

Components of IS

1. Revenues = Sales

2. Expenses :

- grouped by nature : 각각 하나하나 특성에 따른 분류 

- grouped by function : 비슷한 기능을 하는 비용을 하나로 묶음 ex. COGS

3. Gain and losses : not result from ordinary buiness activities

Presentation formats 

Revenues(Sales)

COGS

 Gross profit

SG&A

Depreciation expense

lease expense

 Operating profit(EBIT)

Interest expense

 Income before tax (EBT)

provision for income taxes

 Income from continuing operations

Earnings(losses) from discontinued operations, net of tax

 Net income = earnings , bottom line

b. describe general principles of revenue recognition and accrual accounting, specific revenue recognition applications (including accounting for long-term contracts, installment sales, barter transactions, gross and net reporting of revenue), and implications of revenue recognition principles for financial analysis. (page 30) 

c. calculate revenue given information that might influence the choice of revenue recognition method. (page 30)

수익인식 및 발생주의 회계의 일반적 원칙

- revenue is recognized when earend, expense는 when incurred

- reliably measured, probable flow 일 때 인식

특정한 수익 인식의 적용

Long-Term Contracts 장기계약

1. percentage-of-completion method

- outcome이 확실한 경우

- 진행률(누적)로 수익인식

2. completed-contract method

- outcome이 불확실한 경우

- IFRS : Cost만큼만 수익인식

- US GAAP : 모든 제품 인도, 서비스제공 완료시 수익인식

Installment Sales 할부판매, 분할납부 

Collectibility 회수가능성

1. Certain

- 즉시 인식(at the time of sale)

2. cannot be reasonably estimated

- Installment method

Cost와 Sales로 마진율을 구하고 각 년도에 적용

3. highly uncertain

- cost recovery method

Total Cost를 다 지울때까지, revenue가 들어올 때마다 비용처리

Barter Transactions 물물교환 

US GAAP - revenue는 fair value로 인식, fair value 없으면 carrying value(book)

IFRS - revenue는 fair value로 인식

Gross and Net Reporting of Revenue 총수익, 순수익

동일 거래에 대해서,

Gross reporting - revenue 10000, expense 9000, profit 1000

Net reporting - revenue 1000, expense 0, profit 1000

d. describe key aspects of the converged accounting standards for revenue recognition issued by the International Accounting Standards Board and Financial Accounting Standards Board in May 2014. (page 35)

Key aspects of the converged accounting standards

- principles-based approach (수익인식에 대해 적용)

converged standards, five-step process for recognizing revenue

1. Identify Contract

2. Identify performance obligation

3. Determine transaction price

4. Allocate transaction price

5. Recognize revenue

e. describe general principles of expense recognition, specific expense recognition applications, and implications of expense recognition choices for financial analysis. (page 38)

- matching principles

- 모든 수익이 비용과 대응되는 것은 아닌데, 이러한 비용을 period costs라고 함(ex. administrative costs)

Inventory Expense Recognition

- FIFO

- LIFO

- Weighted Avg

Depreciation Expense Recognition

- straight-line depreciation 정액법

- accelerated depreciation method = declining balance method(DB) 정률법, DDB(Double Declining Balance method)사용

* residual value를 넣지 않는다. 마지막에 조정해줌

Amortization Expense Recognition

- Intangible asset에 대한 감가상각

- indefinite lives 내용연수 알 수 없는 경우 not amortized

- at least annually 로 impairment 여부 test해야함

Bad Debt Expense and Warranty Expense Recognition

- 대손, 보장비용 인식

f. describe the financial reporting treatment and analysis of non-recurring items (including discontinued operations, unusual or infrequent items) and changes in accounting policies. (page 41)

Non-Recurring Items

- Discontinued operations

- Unusual or infrequent items (impairments, write-offs, write-down ...) : 계속사업이익에 해당

Changes in accounting policies

- retrospective application

Change from an incorrect accounting method

- retrospective application = prior-period adjustment

Changes in accounting estimate(새로운 정보로 managements's judgment가 바뀐 경우)

- prospectively application

g. distinguish between the operating and non-operating components of the income statement. (page 43)

h. describe how earnings per share is calculated and calculate and interpret a company's earnings per share (both basic and diluted earnings per share) for both simple and complex capital structures. (page 45)

I. distinguish between dilutive and antidilutive securities and describe the implications of each for the earnings per share calculation. (page 45)

EPS(Earnings Per Share) : profitability performance measure 

1. simple capital structure

- no potentially dilutive securities

- basic EPS만 공시

2. complex capital structure

- potentially dilutive securities (ex. option, warrants, CB)

- complex captial structure 기업은 반드시 basic EPS, diluted EPS 둘 다 공시해야함

basic EPS

= (NI - preffered dividends) / weighted avg # of common shares

weighted average number of common shares : 보통주의 가중평균수량

예시)

1/1 10,000 shares outstanding

4/1 issues 4,000 new shares

7/1 10% stock dividend

9/1 repurchases 3,000 shares

- stock dividend : 주식배당

- stock split : 주식분할

- 100개 주식에 대해, 2-for-1 split(1개를 2개로 split) =>150개

- 주식배당과 주식분할은 applied to all shares outstanding prior to split or dividend

Diluted EPS : 희석 주당순이익 

Dilutive

- stock option, warrants, CB 등 주식으로 전환시 basic EPS보다 작아짐

Antidilutive

- stock option, warrants, CB 등 주식으로 전환시 basic EPS보다 커짐

- * 반영안함 (Dilutive EPS = Basic EPS)

= {(NI - pref.div) + (전환 pref.div) + (전환 debt interest)*(1-t)} / 가중평균common shares + 전환수량

* convertible bond의 경우 (1-t)를 곱해줘야함

* 전환해서 diluted EPS를 구했는데 Antidilutive한 경우 반영 안함!

stock option & warrants

- exercise prices 와 *average market price 비교(not ending price)

- treasury stock method 사용(행사가격x전환주식수 만큼 자금 inflow된 것을 시장평균가격으로 재매입 한다고 가정, 이렇게 되면 재매입한 수량보다 전환한 주식수량이 더 많은데 순증가한 만큼만 가중평균주식수에 포함시키는 개념) 

ex. 100,000 stock option, 15$ exercise price, 20$ mkt avg price

100,000 - 75,000(재매입) = 25,000 만큼만 순증가

75,000 = 1,500,000/20$

j. convert income statements to common-size income statements. (page 53)

(vertical) common-size income statement

- percentage of revenue

- 비율로 나타내서 eliminate the effects of size

- 일반적으로 적절하지만, income tax expense에 대해서는 부적절, revenue에 대한 비율이 아니라 pretax income을 기준으로 해야함(이렇게 계산된 tax rate = effective tax rate)

k. evaluate a company's financial performance using common-size income statements and financial ratios based on the income statement. (page 54)

gross profit margin = gross profit/revenue

net profit margin = net income/revenue

l. describe, calculate, and interpret comprehensive income. (page 54)

m. describe other comprehensive income and identify major types of items included in it. (page 54)

Comprehensive income = net income + other comprehensive income

- 영업외의 활동에서 벌어들이는 소득을 포함하는 개념

other comprehensive income

- unrealized gains and losses

- Foreign currency translation gains and losses