Financial statement DNA tick sheet[财务报表的DNA刻度表]

How does a good understanding of the numbers help a banker? They can:

• Extract and normalise financials for analysis
  

• Analyse the performance, leverage, liquidity and efficiency
  

• Forecast the financials, often under different scenarios, going forward
  

• Assess the financial impacts of a proposed investment, acquisition, disposal, divestment, refinancing,etc
  

• Build consistent multiples for comps purposes
  

• Derive forecast cash flows for DCF  valuation purposes
  

• Combine bidder and target entities in order to assess the EPS, return on investment and credit rating impacts of an acquisition
• Assess risk and then price that risk into the financial products offered on behalf of clients
  

Financial statements DNA - the DNA fragments:

• Assets - benefits
  

• Liabilities - obligations
  

• Equity - ownership
  

• Income - earned
  

• Expense - incurred
  

• The primary financial statements are:
  

• Balance sheet
  

• Income statement
  

• Cash flow statement
  

The two main accounting frameworks are:

• IFRS
• USGAAP
  

IFRS must be used by EEA listed companies

IFRS can be used in over 100 countries

US GAAP aims to transition to IFRS by 2014