Finding your Way

around Public
Financials

2016 Financial Edge Training

Contents
Real financial statements
Using financial statements
EBIT and EBITDA calculations
OWC and Net debt calculations

2016 Financial Edge Training

Real Financial Statements

Press release
Short
High level results
Explanation of performance

Full financials
MD&A
Overview of the
business
Discussion of results
Year on year
comparison
Non GAAP measures

Main statements

Footnotes

Income statement

Accounting policies

Statement of comprehensive
income

Acquisitions and
divestitures

Balance sheet

Restructuring

Statement of stockholders
equity

Liquidity and capital

resources

Cash flow statement

2016 Financial Edge Training

Debt
Shareholders equity
Segmental results

Using Financial Statements

ANCHOR

WHAT

CONSISTENT

DOUBLE COUNT

Main financial
statement?

Information
sought?

With information
elsewhere?

Very easy to do

Use search functionality judiciously sometimes more distracting than helpful

2016 Financial Edge Training

EBIT and EBITDA Calculations

1

ANCHOR = operating profit = the line

ANCHOR = go back and check if confused

Check above the line for non recurring

items included

Add or subtract to remove

Check below the line for items excluded

Always look up other if above the line

Trawl MD&A for embedded non recurrings

Press release also a good source for context

Use footnotes for more detail/ consistency

cross check

Varied slicing and dicing means double counting is

a danger

2016 Financial Edge Training

OWC and Net Debt Calculations

OWC

Net Debt

Operating current assets

Interest bearing liabilities

Operating current liabilities

Cash, cash equivalents and

readily liquid investments

Normally from BS ANCHOR

Some footnote detail

Normally from BS ANCHOR

Lots of MD&A/footnote detail

2016 Financial Edge Training

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2016 Financial Edge Training