BE4 Summary
Table of content
Direct method and Indirect method............................................................................................................... 2
Direct method:......................................................................................................................................................2
Indirect method:...................................................................................................................................................3
LIFO / FIFO / WAC.......................................................................................................................................... 4
LIFO:......................................................................................................................................................................4
FIFO:......................................................................................................................................................................4
WAC:.....................................................................................................................................................................4
Product matching & period matching............................................................................................................. 4
Product matching:................................................................................................................................................4
Period matching:..................................................................................................................................................4
Example:..........................................................................................................................................................4
Depreciation.................................................................................................................................................. 5
Straight line depreciation.....................................................................................................................................5
Example table:.................................................................................................................................................5
Percentage depreciation.......................................................................................................................................5
Shares........................................................................................................................................................... 5
Chapter 14..................................................................................................................................................... 7
Chapter 15..................................................................................................................................................... 8
Chapter 16..................................................................................................................................................... 9
Chapter 17..................................................................................................................................................... 9
Chapter 18................................................................................................................................................... 10
, Income statement (profit & loss
statement)
Sales
- Cost of sales
= gross profit
- Costs
= EBIT (earnings before interest & tax)
- Interest
= profit before taxes
- Taxes
= profit after taxes
Direct method and Indirect method
Direct method:
It depends, you have to put in the receipts, accounts receivable
Payments for purchases inventories, accounts payable
Investments fixed assets
Did the fixed assets go up or down? If they went down, is it because of depreciation? Or depreciation in
combination with investments?
Financing equity, long term loans
Direct method notes:
If you buy new machines, old ones are sold
Capital share + share premium reserve = share issue
Profit can be divided dividend & retained profit
Original value of a share: par value
Difference price you sell shares for and par value: share premium
Every time you pay something, its negative on the cash flow statement
Start:
CF operational activities
- Receipts
Sales revenue +/- accounts receivable (if acc rec ^ = -, if acc rec v = +)
Payments: (always minus - )
- Purchases: inventories 1 + purchases ? = ? – cost of sales = inventories 2
Acc pay 1 + purchases = ? – payments ? = acc pay 2
Other expenses:
- Operating costs
- Interest
- Tax (the first tax payable)
Table of content
Direct method and Indirect method............................................................................................................... 2
Direct method:......................................................................................................................................................2
Indirect method:...................................................................................................................................................3
LIFO / FIFO / WAC.......................................................................................................................................... 4
LIFO:......................................................................................................................................................................4
FIFO:......................................................................................................................................................................4
WAC:.....................................................................................................................................................................4
Product matching & period matching............................................................................................................. 4
Product matching:................................................................................................................................................4
Period matching:..................................................................................................................................................4
Example:..........................................................................................................................................................4
Depreciation.................................................................................................................................................. 5
Straight line depreciation.....................................................................................................................................5
Example table:.................................................................................................................................................5
Percentage depreciation.......................................................................................................................................5
Shares........................................................................................................................................................... 5
Chapter 14..................................................................................................................................................... 7
Chapter 15..................................................................................................................................................... 8
Chapter 16..................................................................................................................................................... 9
Chapter 17..................................................................................................................................................... 9
Chapter 18................................................................................................................................................... 10
, Income statement (profit & loss
statement)
Sales
- Cost of sales
= gross profit
- Costs
= EBIT (earnings before interest & tax)
- Interest
= profit before taxes
- Taxes
= profit after taxes
Direct method and Indirect method
Direct method:
It depends, you have to put in the receipts, accounts receivable
Payments for purchases inventories, accounts payable
Investments fixed assets
Did the fixed assets go up or down? If they went down, is it because of depreciation? Or depreciation in
combination with investments?
Financing equity, long term loans
Direct method notes:
If you buy new machines, old ones are sold
Capital share + share premium reserve = share issue
Profit can be divided dividend & retained profit
Original value of a share: par value
Difference price you sell shares for and par value: share premium
Every time you pay something, its negative on the cash flow statement
Start:
CF operational activities
- Receipts
Sales revenue +/- accounts receivable (if acc rec ^ = -, if acc rec v = +)
Payments: (always minus - )
- Purchases: inventories 1 + purchases ? = ? – cost of sales = inventories 2
Acc pay 1 + purchases = ? – payments ? = acc pay 2
Other expenses:
- Operating costs
- Interest
- Tax (the first tax payable)
