STATEMENT OF

COMPREHENSIVE
INCOME
THE INCOME STATEMENT: example and info”s

GRADE 12-FALCON PRESENTATION

DEFINITION:

The statement of comprehensive

income a financial statement
That shows a company’s total income
and expenses for specific
period. It includes all operational
income and expenses, as well
non-operational transactions and other
income and expenses
not related to the core business
operations. It typically consists of two
parts: the income statement, which
displays operational income and
expenses.
INCOME
STATEMENT
• INCOME STATEMENT :
measures of performance
Over a certain period of time.

• Compares inflows ( “revenue” or

“sales” )
with outflows ( “ Costs” or
“expenses” )
• Revenue – Expenses = net
income
INCOME STATEMENT – BY FUNCTION:

Sales

Cost of Sales

Sales, General & Administrative

Other Operating Income

Net Interest Expense

Tax Expense

Net Profit/Loss
The Income Statement

Earning Before Income &

Taxes (EBIT)
EBIT = - total revenue
- costs
- deprecation
 THE INCOME STATEMENT
Timberland Co. Year End 12/31/2001 – in thousand

Revenue 1,183,623
Average O/S
COGS 662,848 Shares
40,247
SG & A 334,490
EBIT 186,285
Depreciation & 23,192
Amortization
Interest Expense 1,560
Other income 196
EBT 161,729
Tax Expense 54,988
Net Income 106,741
STATEMENT OF
FINANCIAL
ANALYSIS
typically refers to a detailed
examination and
interpretation of a company's
financial statements. This
analysis provides insights into
the financial health,
performance, and position of
the company. It involves
evaluating various financial
metrics, ratios, and trends to
assess the company's
profitability, liquidity,
1. Cash Flow Statement
Analysis: This involves
analyzing the company's
cash inflows and outflows
from operating, investing,
and financing activities. Key
metrics such as operating
cash flow ratio and free cash
flow are assessed to
determine the company's
ability to generate cash and
fund its operations,
2. Financial Ratios
Analysis: Various
financial ratios are
calculated to provide
insights into different
aspects of the
company's financial
performance and
position. These ratios
include profitability
ratios, liquidity ratios,
solvency ratios,
3. Trend Analysis:
Historical financial data
is analyzed to identify
trends, patterns, and
changes in the
company's financial
performance and
position over time. This
helps in understanding
the company's
trajectory and
forecasting future
STATEMENT OF
CASHFLOW
The Statement of Cash Flows
reconciles changes in the
company's cash and cash
equivalents from the beginning to
the end of the reporting period. It
ensures that the change in cash
balance reported in the statement
matches the change in cash
balance reported on the
company's balance sheet. By
providing a detailed breakdown of
cash flows, this statement helps
stakeholders assess a company's
liquidity, financial flexibility, and
1. Operating Activities:
This section reports cash
flows generated or used in the
company's primary business
operations. It includes cash
receipts from customers, cash
payments to suppliers and
employees, and other
operating expenses. The net
cash flow from operating
activities is often considered a
key indicator of a company's
2. Investing Activities: This
section reports cash flows
related to the buying and
selling of long-term assets and
investments. It includes cash
payments for the purchase of
property, plant, and equipment
(capital expenditures), as well
as cash receipts from the sale
of investments or assets.
Investing activities also
encompass investments in
securities, loans made to other
entities, and proceeds from the
3. Financing Activities: This
section reports cash flows related
to the company's financing
activities, such as raising capital
and repaying debt. It includes
cash inflows from issuing stock or
borrowing funds (e.g., issuing
bonds or taking out loans) and
cash outflows from repaying debt
(e.g., principal payments on
loans) or returning capital to
shareholders (e.g., dividends).
Financing activities also
encompass cash transactions
THE BALANCE
SHEET
The balance sheet is a
financial statement that
provides a snapshot of a
company's financial position
at a specific point in time. It
presents the company's
assets, liabilities, and
shareholders' equity,
reflecting the fundamental
accounting equation:
Assets = Liabilities +
Shareholders' Equity. The
Assets: Assets represent the resources
owned or controlled by the company that
have economic value and are expected to
provide future benefits. Assets are
categorized into current assets and non-
current assets.
•Current Assets: Current assets are assets
that are expected to be converted into cash
or used up within one year or the operating
cycle of the business, whichever is longer.
Examples include cash and cash
equivalents, accounts receivable, inventory,
and prepaid expenses.
•Non-current Assets: Non-current assets are
assets that are expected to provide benefits
to the company for more than one year.
Examples include property, plant, and
Liabilities: Liabilities represent the
company's obligations or debts to
external parties. Liabilities are also
categorized into current liabilities and
non-current liabilities.
•Current Liabilities: Current liabilities
are obligations that are expected to
be settled within one year or the
operating cycle of the business,
whichever is longer. Examples include
accounts payable, short-term debt,
accrued expenses, and deferred
revenue.
•Non-current Liabilities: Non-current
liabilities are obligations that are not
expected to be settled within one
year. Examples include long-term
Shareholders' Equity: Shareholders'
equity represents the residual interest in
the company's assets after deducting its
liabilities. It reflects the shareholders'
ownership stake in the company and is
composed of various components,
including:
•Common Stock: The amount invested by
shareholders in exchange for shares of
ownership in the company.
•Additional Paid-in Capital: The excess
amount received from issuing stock over
its par value.
•Retained Earnings: The cumulative net
earnings or losses of the company
retained and reinvested in the business
The Guide’s to
Earning and
Financial
Reporting
Quantity
Ensuring earnings
and financial
reporting quality is
essential for
maintaining
transparency,
building investor
trust, and making
informed business
1. Adopting Generally
Accepted Accounting
Principles (GAAP):
•Follow established
accounting principles and
standards, such as GAAP or
International Financial
Reporting Standards (IFRS),
to ensure consistency,
comparability, and
2. Maintaining Integrity
and Objectivity:
•Ensure that financial
reporting is truthful,
accurate, and free from
bias or manipulation. Avoid
conflicts of interest and
maintain independence in
the preparation and review
of financial statements.
3. Implementing Internal
Controls:
•Establish robust internal
control systems to safeguard
assets, prevent fraud, and
ensure the accuracy and
reliability of financial reporting
processes. Regularly assess
and update internal controls to
address emerging risks and
changes in the business
4. Enhancing Disclosure
and Transparency:
•Provide comprehensive and
transparent disclosures in
financial statements,
footnotes, and management
discussions and analysis
(MD&A). Disclose significant
accounting policies,
estimates, and assumptions
to help users understand
the basis of financial
5. Conservative
Accounting Practices:
•Apply conservative
accounting practices when
recognizing revenues,
expenses, and asset
values. Avoid aggressive
accounting techniques that
may inflate financial
performance or obscure
THANK YOU!!!
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THE INCOME STATEMENT: example and info”s
GRADE 12-FALCON PRESENTATION