How can you tell if a company s financial statements are problematic?

A company's financial statements consist of three tables: a balance sheet, an income statement, and a cash flow statement. The balance sheet reflects the company's assets and liabilities for a certain period of time, the income statement reflects the company's profit for a certain period of time, and the cash flow statement reflects the inflow and outflow of cash and bank deposits of the company.

1. About the balance sheet: The balance sheet consists of three parts, including assets, liabilities and owners' equity, assets = liabilities + owners' equity. Assets are divided into current assets and non-current assets, with current assets including monetary funds, accounts receivable, prepaid accounts, inventory, etc., and non-current assets including fixed assets and intangible assets.

Liabilities are divided into current liabilities and non-current liabilities, with current liabilities including accounts payable, employee remuneration payable, advance receivables, short-term borrowings, taxes payable, etc., and long-term borrowings and other non-current liabilities in non-current liabilities. Owners' equity includes paid-up capital, capital reserve, surplus reserve and undistributed profits.

2. About the income statement: net profit = main business income + other business income + investment income + subsidy income + non-operating income + asset disposal income - main business cost - other business costs - main business taxes and surcharges - operating expenses - management expenses - financial expenses - non-operating expenses - asset impairment losses - income tax. To maximize shareholder value, it is necessary to increase profits.

3. About the cash flow statement: The cash flow statement is divided into three parts, and the company's cash flow is operating activities, investment activities and financing activities. The first is the cash flow generated by operating activities, which refers to the cash flow generated by ordinary operations.

Net cash flow from operating activities refers to the difference between operating inflow and outflow in a certain period, and the optimal amount of this part is higher than the profit in the income statement for the same period. The second refers to the cash flow generated by investment, including fixed assets, investment associations, etc. This part will ultimately result in the net cash flow generated by an investment activity, as well as the difference between the investment and the investment over a certain period of time.

The third is the cash flow generated by financing activities, including the flow of funds for loans and investments.

A good financial report should provide the most appropriate reflection of the value of the business. Specifically, the "net assets" in the balance sheet should reflect the value of the enterprise, the "profit for the year" in the income statement should reflect the value increment of the enterprise in the current year, and the net cash flow of the enterprise in the cash flow statement should mainly come from the operating income of the enterprise.

First of all, it is necessary to analyze the company's liquidity, then to look at the company's operating ability, and then to analyze the long-term solvency, so that the company's financial statements can be understood.

The company's financial statements should not only pay attention to the final balance amount, but also pay attention to the items spent in the entire statement, and whether the total amount spent is consistent with the final amount.

The company's financial statements should be generally browsed, and it is also necessary to understand the situation of shareholders' holdings, the holding ratio, and then the items with large amounts and the items with large changes.

The problem is huge.

To put it in a non-professional colloquialism.

Take a look at the balance sheet: the asset side is the things owned by the company, such as cash, fixed assets, and inventory; There are two parts of the debtor, one part is the debt that Mingzhao Company owes to others, such as the wages owed to employees, the tax payable to the tax bureau, the accounts payable to the first businessman, and the other part is equity, which is invested by shareholders in the company, so that the three aspects come down: the company has (assets) = owed to others (liabilities) + shareholders invested (equity).

Look at the balance sheet to know these things, how many things the company has, these things come from the investment of shareholders or borrowed, the most basic indicator is the negative asset debt ratio = liability assets, this indicator shows how much of the company's things are borrowed to be repaid, how much is its own.

Second, look at the profit and loss statement: that is, the income statement, this statement shows how much income the company has earned and how much cost it has spent in a year, and how much it has earned or lost through a year of operation. The most basic indicator is the profit margin, that is, the ability to make a profit, the company tossed for a year, sold 100 million things, and finally made 5 yuan, it's not worth it, right?

Third, look at the cash flow statement: this table shows how much cash the company has, how much cash it has recovered from selling things, how much money it has spent on buying materials, and whether the company has enough cash to pay back when it owes the bank 100 million...

It mainly depends on what aspect of the company you want to analyze through the report, whether it sells enough? Or is the earning ability strong enough, or the money on hand is not much.

We all know that the essence of choosing a good company is to choose a good company, so everyone must hope that they can buy a company with strong profitability and high solvency. So how do you choose a good company? This requires us to be able to look at the financial statements.

Through a detailed analysis of the company's financial report, we can quickly understand the business profile of a company, and use it as the basis for our investment decisions, and establish a set of our own financial report analysis framework.

Through financial data, let us find a lot of excellent companies, but also can eliminate a lot of garbage companies, today I will tell you about the two common ways for companies to beautify financial reports through receivables:

The first is inflated income.

Inflated income, that is, the company's own products, directly to others to sell, so that their own operating income increases, so if the company purely wants to beautify the income statement, he can sell his own products through a large number of credit sales, so as to make the operating income and net profit on the financial report.

Therefore, if you see through the financial statements that a company's accounts receivable suddenly increased significantly, and far exceeded the growth rate of total operating income in the same period, it may indicate that the company has temporarily relaxed the policy and increased credit sales, and must be vigilant.

But it should be noted here that the significant increase in accounts receivable, although it may be that the company is deliberately inflating revenue; It may also be the normal arrears caused by the temporary lack of money in the hands of some downstream buyers, and the substantial increase in accounts receivable cannot be killed with a stick, and it should be analyzed in combination with the specific situation of the company.

The second is the falsification of accounts.

Some companies feel that their accounts receivable are too large and their financial reports are not good-looking, and they are afraid of arousing investors' vigilance, so they will consciously hide their accounts receivable. Through the method of writing off the accounts, the money appeared in the statement in a different way.

Therefore, if a company with a large amount of accounts receivable suddenly solves the accounts receivable problem one day, then everyone needs to pay attention to whether the company has added other abnormal expenses, such as prepaid accounts, etc., which may be used to beautify their statements. After all, accounts receivable is someone else owes money to the company, and ruined investors will worry about whether it will become bad debts; Turning into an advance account doesn't feel so negative, and it's less likely that people will pay too much attention to it.

If it is an accounting master, it is difficult to see the truth from the report alone.