Learn How to Analyze Financial Statements with Analysis Laporan Keuangan Subramanyam Pdf 158l
Analysis Laporan Keuangan Subramanyam Pdf 158l
Analysis Laporan Keuangan Subramanyam Pdf 158l is a book that teaches how to analyze financial statements using various tools and techniques. Financial statement analysis is the process of examining the financial information of a company or an industry in order to evaluate its past performance, current condition, and future prospects. Financial statement analysis is important for various users of financial information, such as investors, creditors, managers, regulators, auditors, analysts, and researchers.
Analysis Laporan Keuangan Subramanyam Pdf 158l
This book covers 11 chapters that discuss different aspects of financial statement analysis. The book is written by K.R. Subramanyam and John J. Wild, who are both professors of accounting at the University of Southern California and the University of Wisconsin-Madison respectively. The book is published by Salemba Medika in Jakarta in 2010. The book is based on the original edition titled Financial Statement Analysis by the same authors.
In this article, we will summarize the main topics and concepts covered in each chapter of the book. We will also provide some examples and exercises to help you understand and apply the concepts. By the end of this article, you should be able to:
Explain the objectives and limitations of financial statement analysis
Identify the sources and types of financial information
Apply the tools and techniques of financial statement analysis
Evaluate the quality of financial reporting and detect earnings management
Analyze the financing, investing, and operating activities of a company
Prepare and interpret the statement of cash flows
Calculate and interpret return on invested capital and profitability ratios
Forecast future financial statements and perform sensitivity analysis
Assess the credit risk and creditworthiness of a company
Analyze the equity value and performance of a company
Use different valuation models and incorporate risk, growth, and competitive advantage factors
Overview of Financial Statement Analysis
The first chapter of the book introduces the basic concepts and framework of financial statement analysis. It explains the objectives and limitations of financial statement analysis, the sources and types of financial information, and the tools and techniques of financial statement analysis.
The objectives of financial statement analysis are to:
Evaluate the past performance, current condition, and future prospects of a company or an industry
Make informed decisions and judgments based on financial information
Assess the risks and returns associated with investing in or lending to a company or an industry
Provide feedback and recommendations to improve the performance and governance of a company or an industry
The limitations of financial statement analysis are:
The quality and reliability of financial information may vary depending on the accounting principles, standards, choices, estimates, and disclosures used by different companies or industries
The financial information may not reflect all the relevant economic factors that affect the performance and value of a company or an industry, such as market conditions, competition, innovation, regulation, social responsibility, etc.
The financial information may be subject to manipulation or distortion by managers or other parties who have incentives to influence the reported results or expectations
The financial information may not be comparable across different companies or industries due to differences in size, structure, strategy, business model, accounting policies, etc.
The financial information may not be timely or updated enough to capture the current or future situation of a company or an industry
The sources of financial information are:
The primary sources are the financial statements prepared by the company itself, such as the income statement, balance sheet, statement of changes in equity, statement of cash flows, and notes to the financial statements. These statements provide quantitative information about the revenues, expenses, assets, liabilities, equity, cash flows, and other transactions and events of a company.
The secondary sources are the supplementary information provided by the company or other parties, such as the annual report, management discussion and analysis (MD&A), auditor's report, press releases, conference calls, investor presentations, etc. These sources provide qualitative information about the strategy, goals, plans, risks, opportunities, challenges, outlooks, etc. of a company.
The external sources are the information obtained from outside sources that are independent from the company itself. These sources include analyst reports, financial databases, industry publications, news articles, academic journals, government agencies, regulatory bodies, rating agencies, etc. These sources provide additional information about the industry trends, market conditions, competitor actions, customer preferences, regulatory changes, economic indicators, etc. that affect the performance and value of a company.
The types of financial information are:The historical information is the information that reflects the past performance and condition of a company or an industry. This type of information is useful for evaluating the track record, strengths, weaknesses, and achievements of a company or an industry.
The current information is the information that reflects the present situation and status of a company or an industry. This type of information is useful for assessing the current position, resources, capabilities, and challenges of a company or an industry.
The prospective information is the information that reflects the future expectations and projections of a company or an industry. This type of information is useful for estimating the potential outcomes, opportunities, risks, and returns of a company or an industry.
< The tools and techniques of financial statement analysis are: - Horizontal analysis: This technique compares data horizontally, by analyzing values of line items across two or more years. For example, in the income statement, the sales figure may be compared over a period of consecutive years to understand how the sales figures have grown (or declined) over the year. Horizontal analysis helps to identify trends, growth rates, and patterns in the financial statements. - Vertical analysis: This technique looks at the vertical effects that line items have on other parts of the business and the businesss proportions. For example, in the income statement, operating expenses, depreciation, amortization, profit before tax, tax, profit after tax, etc. may be represented as a percentage of sales. Vertical analysis helps to evaluate the internal structure, composition, and efficiency of the financial statements. - Ratio analysis: This technique uses important ratio metrics to calculate statistical relationships between different line items or groups of line items in the financial statements. For example, leverage ratios measure the degree of debt financing used by a company; profitability ratios measure the ability of a company to generate income from its operations; liquidity ratios measure the ability of a company to meet its short-term obligations; etc. Ratio analysis helps to assess the performance, position, and value of a company relative to its peers or industry benchmarks. - Trend analysis: This technique uses historical data to project future values or outcomes based on a pattern or direction of change. For example, trend analysis can be used to forecast future sales, earnings, cash flows, etc. based on past growth rates or averages. Trend analysis helps to estimate the potential and prospects of a company or an industry. Financial Reporting and Analysis
The second chapter of the book discusses the accounting principles and standards that govern financial reporting and analysis. It also explains the common accounting choices and estimates that affect financial statements and how to evaluate the quality of financial reporting and detect earnings management.
The accounting principles and standards that govern financial reporting and analysis are:
The generally accepted accounting principles (GAAP) are the rules and conventions that provide a common framework for preparing and presenting financial statements in a consistent and comparable manner. GAAP are established by authoritative bodies such as the Financial Accounting Standards Board (FASB) in the United States and the International Accounting Standards Board (IASB) globally.
The International Financial Reporting Standards (IFRS) are a set of accounting standards that aim to harmonize financial reporting across different countries and regions. IFRS are issued by the IASB and are adopted by more than 140 countries worldwide.
The Sarbanes-Oxley Act (SOX) is a federal law that was enacted in 2002 in response to several corporate scandals involving fraudulent financial reporting. SOX aims to enhance the reliability and transparency of financial reporting by imposing stricter rules and regulations on public companies, auditors, boards of directors, management, etc..
The common accounting choices and estimates that affect financial statements are:
The accounting policies are the specific methods and procedures that a company uses to measure and report its financial transactions and events. Accounting policies may vary across different companies or industries depending on their nature of business, preferences, or strategies. For example, some companies may use the first-in first-out (FIFO) method to value their inventory while others may use the last-in first-out (LIFO) method; some companies may use the straight-line method to depreciate their fixed assets while others may use the accelerated method; some companies may use the percentage-of-completion method to recognize their revenue from long-term contracts while others may use the completed-contract method; etc..
The accounting estimates are the approximations or judgments that a company makes to assign values to certain items in its financial statements when precise measurements are not possible or feasible. Accounting estimates may change over time depending on new information, assumptions, or expectations. For example, some accounting estimates include the allowance for doubtful accounts, the useful life and residual value of fixed assets, the warranty liability, the fair value of financial instruments, the impairment loss of goodwill, etc..
The quality of financial reporting and earnings management are:The quality of financial reporting is the degree to which the financial statements of a company reflect its true economic performance and condition in a clear, complete, and reliable manner. High-quality financial reporting enhances the confidence and trust of the users of financial information and facilitates the decision-making process. Low-quality financial reporting impairs the usefulness and relevance of financial information and may mislead or confuse the users.
Earnings management is the deliberate manipulation or distortion of the reported earnings or income of a company by using accounting choices, estimates, or transactions to influence the reported results or expectations. Earnings management may be motivated by various reasons, such as meeting or beating analyst forecasts, smoothing earnings fluctuations, avoiding earnings declines or losses, influencing stock prices or compensation plans, etc. Earnings management may be legal or illegal depending on the degree and intention of the manipulation.