The balance sheet is an accounting statement that reflects all assets, liabilities and owners' equity of the company on a specific date (the end of the month and the end of the year). Its basic structure is "assets = liabilities+owners' equity". No matter what state the company is in, this accounting balance is always the same. The left side reflects the resources owned by the company; The right side reflects the requirements of different owners of the company for these resources. Creditors can claim all the resources of the company, and the company is liable to different creditors with all its assets. After paying all liabilities, what remains is owner's equity, which is the company's net assets.
Using the data in the balance sheet, we can see the distribution of assets and liabilities and the composition of owners' equity, so as to evaluate whether the company's capital operation and financial structure are normal and reasonable; Analyze the company's liquidity or liquidity, as well as the amount and solvency of long-term and short-term debts, and evaluate the company's ability to take risks; The information provided by this table is also helpful to calculate the profitability of the company and evaluate its operating performance.
When analyzing the balance sheet elements, we should first pay attention to the analysis of asset elements, including:
Analysis of current assets of 1 Analyze the company's cash, various deposits, short-term investments, various receivables and payables, inventory, etc. The current assets are higher than in previous years, indicating that the company's ability to pay and liquidate is enhanced.
2 Long-term investment analysis. Analysis of investments for more than one year, such as company holding and diversification. The increase in long-term investment shows that the company's growth prospects are promising.
3 fixed assets analysis. This is an analysis of physical assets. The figures of fixed assets listed in the balance sheet only indicate the amount of fixed assets that have not been depreciated and lost under the conditions of going concern and are expected to be recovered in the future. Therefore, we should pay special attention to whether depreciation and loss are reasonable or not, which will directly affect the accuracy of statements such as balance sheet and income statement. Obviously, less depreciation will increase the current profit. However, more depreciation will reduce the current profits, and some companies often lay the groundwork for this.
4 Analysis of intangible assets. It mainly analyzes trademark right, copyright, land use right, non-patented technology, goodwill, patent right and so on. Goodwill and other intangible assets without clear reference are generally not recorded unless goodwill is formed at the time of purchase or merger. After acquiring intangible assets, they should be registered and amortized within the prescribed time limit.
Secondly, it is necessary to analyze the elements of liabilities, including two aspects:
Analysis of current liabilities of 1. All current liabilities should be accounted for according to the actual amount incurred. The key to analysis is to avoid omissions, and all liabilities should be reflected in the balance sheet.
2 Long-term debt analysis. Including long-term loans, bonds payable, long-term payables, etc. Due to the different forms of long-term liabilities, we should pay attention to the analysis and understanding of corporate creditors.
Finally, analyze shareholders' rights and interests, including share capital, capital reserve, surplus reserve and undistributed profit. The analysis of shareholders' equity is mainly to understand the different forms and ownership structure of invested capital in shareholders' equity, and to understand the priority payment order of each element in shareholders' equity. When looking at the balance sheet, we should combine the income statement, which mainly involves capital gains and inventory turnover. The former is an indicator of profitability, while the latter is an indicator of operational capability.
How to read the income statement
The income statement is based on "revenue-expense = profit", which mainly reflects the company's net income after deducting operating expenses in a certain period of time. Through the income statement, we can roughly evaluate the operating performance and management success of listed companies, thus evaluating the investment value and return of investors. The income statement includes two aspects: first, it reflects the company's income and expenses, and explains the company's profit and loss amount in a certain period, so as to analyze the company's economic benefits and profitability and evaluate the company's operating performance; The other part reflects the sources of the company's financial achievements, and explains the proportion of the company's various profit sources in the total profit and the relationship between these sources. Analysis of the income statement, mainly from two aspects:
1. Analysis of income items. The company obtains all kinds of operating income by selling products and providing services, and can also provide resources for others to use and obtain non-operating income such as rent and interest. An increase in income means an increase in assets or a decrease in liabilities.
The income account includes cash income, bills receivable or accounts receivable received in the current period, and is recorded according to the actual amount received or book value.
2. Cost project analysis. Expenses are the deduction of income, and the confirmation and deduction of expenses are directly related to the company's profits. Therefore, when analyzing expense items, we should first pay attention to whether the content of expenses is appropriate, and confirm that expenses should implement accrual basis principle, historical cost principle, and the principle of dividing revenue expenditure and capital expenditure. Secondly, it is necessary to analyze the structure and changing trend of costs and expenses, analyze the percentage of various expenses in operating income, analyze whether the cost structure is reasonable, and find out the reasons for unreasonable expenses. At the same time, the expenses are analyzed to see the trend of increase and decrease, so as to judge the company's management level and financial situation and predict the company's development prospects.
When reading the income statement, it should be linked with the financial statements of listed companies. Mainly explain the production and operation of the company; Profit realization and distribution; Accounts receivable and inventory turnover; Changes in various properties and materials; Payment of taxes; Matters that are expected to have a significant impact on the financial position of the company in the next accounting period. Financial statements provide detailed information for financial analysis to understand and evaluate the company's financial situation.