Name: Mod-01 Lec-09 財務諸表分析 (Mod-01 Lec-09 Financial Statement Analysis)
Uploaded: 2021-01-14T06:55:56.000Z
Duration: 59 min 4 s
Description: VoiceTubeの動画で発音を聞きながら英語表現を覚えよう！学べる英語：

Hello, in this unit of security analysis and portfolio management we are going to discuss

基礎受動態

financial statements and their analysis; financial statements mean, the reports that are published

by different companies at the end of a particular accounting period; why do we need this financial

statement? It is because when the investors have invested lot of money in the company

they like to know about the performance of the company at the end of the particular period;

having kept that in mind and also taking into consideration different other stake holders

interest like government, suppliers, creditors, banks and all, the companies report their

financial performance at certain points of time.

In this particular session we are going to discuss about what the financial statements

are and what is their typical content, why we should go for financial statement analysis,

why it is the purpose and what are the tools that we can use for financial statement analysis.

As we discussed financial statements are supposed to provide information that bridge the gap

between the company and the investors in terms of what the company is doing so that the investors

In this, coming to the first one regarding what the financial statements that we have

are - financial statements we have…one of the major statements is called the balance

sheet, then we have another called income statement and then we have got a cash flow

statement. Balance sheet, income statement and cash flow statement - they are published

regularly; if it is annual accounting year then at the end of the particular year we

will find these three reports getting published. What happens is that at the end of the year

- after the accounts are audited - the company comes with the financial results and also

comes with something documental - annual report; annual report will have these things and at

the same time if the company is also listed in the stock exchange, as per Indian law,

the companies are supposed to disclose their financial status every quarter - they will

be disclosing the summary balance sheet or summary income statement at the end of every

quarter. They will disclose to stock exchange and also they will publish the same thing

in the leading news papers - financial news papers and other news papers; through that

the investors can come to know about it. Coming to the major aspect of balance sheet

- balance sheet is essentially a statement of financial position; it says what the company

has at a particular point of time, it is also a statement of assets and liabilities; assets

are what the business owns and only with those things can the business prosper, can generate

revenue. So, assets indicate what the company has, how well it can do, what revenue it can

generate, what the source of revenue and all those things can be known.

That means, how efficiently an asset can be utilized, whether these assets are relevant

assets are not; investors can come to know from these financial statements called balance

sheets - these assets. Liabilities are something, which the business owes to non-owners; then,

we have something called equities - it is what the business owes to the owners.

In fact, whatever the business owes to the owners or outsiders, it is broadly known as

liability - it is liability of the business to the outsiders assess; broadly outsiders

can include the owners, but in a very management point of view the owners are the insiders

of the company and they have invested in the company they also expect something from the

company - to that extent the business is liable to the owners.

Broadly owners’ stake is a liability for the company, but they are insiders of the

company because they own the company assets; otherwise whatever they owe to the banks,

suppliers - because they have taken certain credit - banks, because they have taken a

loan or other investors like debenture holders, bond holders from whom they have borrowed

money they come under liabilities of the business. Then, we have another major statement, which

talks about the periodic financial performance - how this company did, that is called income

statement; income statement essentially gives a summary of revenues and expenses; revenue

from the main line of activity, revenue from other sources of income; like, the company

might have invested some thing in securities and other investments in some other companies;

from that the company might have got some interest or dividends; that also comes as

one of the sources of revenue and then something called expenses also is there.

Revenues and expenses are the major part of income statement and expenses will be given

a broad classification like manufacturing expenses, other operating expenses, financial

expense like interest, then tax provision and subsequently after the tax is paid by

the company then one has the profit after tax and how the profit is distributed; all

these things are given in the income statement. Another major statement that we have is, called

cash flow statement; it talks about where the cash has come from and where the cash

has gone; this cash flow statement classifies the cash flows in three ways: one is operating,

We will be discussing about these typical statements one by one in detail; coming to

the balance sheet which give the assets, the assets are actually classified on different

heads and the first asset is called the fixed asset, then we have got investments; fixed,

then we have got current assets, then we have got intangible assets; when we talk about

fixed assets, fixed assets means the company owns this particular asset or holds on to

the asset for a long period of time. It is not necessary that asset should be fixed with

the land or something like that rather the company has the intention of holding this

asset for a long period of time for a particular purpose.

One simple example could be the plant and machine for a manufacturing company or building

for a manufacturing company or any company for that matter - that becomes a fixed asset,

because this plant and machine could operate for long period of time and generate goods

which can be sold over a period of time. That is why plant and machinery is called

a fixed asset, but these same plant and machineries which are sold by an outlet is like a trading

concern - it is not a fixed asset, it is like a short term asset because they are not be

held for a long period of time. Next, in the assets category is investment;

investment means the investments made by the company in group companies or some other company

or subsidiary companies, where the intention of the investment is for a long term; the

company does not make short term investments rather it has made the investment for a long

period of time - like a strategic control - they have another company.

If they have made some investment equity of the company, they are stake holders of a particular

company - may be inside the country or outside country - or a certain joint venture they

have participated in - some ownership, in that case investments where they are supposed

to get certain income in terms of may be dividend or interest from that company where they have

invested their money. The next thing that we have is called the

current assets; current assets typically mean the assets which can be converted into liquid

cash over a short period of time - typically it is one year; whatever asset that they have

- the company has - that can be converted to into cash or the company has intention

to convert it in to cash in a short period of time - that is called current assets; current

assets have got different types of assets - the first type of asset is cash and cash

equivalents. Whatever cash there is with the company or

whatever is with the bank by the company that is called cash; cash equivalent is - the company

might have put some short term deposits with the intention that instead of keeping the

money idle they can earn some small amount of interest on that; they may have put the

money in some short investments, but the idea is to get back the money whenever we need;

in that case, they will sell the investments and get the cash.

Then we have the receivables; receivables mean…where we have got the…companies made

some credit sales and after the credit sales whatever amount is not collected they are

known as receivables or daters; that is also supposed to be collected back within a short

period of time, that is why it is called as current assets.

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Mod-01 Lec-09 財務諸表分析 (Mod-01 Lec-09 Financial Statement Analysis)

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