Financial Analysis & Taxation Overview | Tiếng anh chuyên ngành 2 | Học viện Tài chính

Definition (1) FINANCIAL ANALYSIS
(selection, evaluation, interpretation of
Financial data + other pertinent information Sources of data (2)
Purposes of financial analysis
How to analyze financial data (for making decisions)
Primary source (financial data in Different groups of users (7)
Income statement analysis
financial statements and annual
need financial analysis for different 2 types of analysis (16) reports) (3) purposes:
+ Vertical analysis (17) Secondary sources (3): The top management
To compare every line item with revenue as + market data (4)
To make any managerial decisions (8) percentages
such as prices of the company shares/ Such as: (9)
+ Horizontal analysis (18) products, etc. + allocation of resources
To evaluate the YoY change in each line
available in financial press/ electronic media
+ improving quality of products item + economic data (5) + expanding the business Balance sheet analysis
Such as GDP, CPI, consumer spending, etc. The investors
+ To analyze the liquidity, leverage,
Provided by government or private sources
To decide whether to invest money (10) operational efficiency (19) + events (6) The creditors
 Liquidity (20)
Show what are happening currently
To decide whether to lend their money (11)
Ratios used: quick ratio/ current ratio/ net
Such as acquiring another company/ Others working capital developing new products/ etc. Including: (12)
 Leverage (21)
Help to explain the company’s present
+ tax offices: to determine tax liabilities (13)
Ratios used: debt to equity/ debt to capital/ condition and future prospects
+ auditors: to review and evaluate the
debt to EBIDA/ interest coverage/ fixed financial data (14) charge coverage ratio
+ functional agencies for the whole industry
 Operational efficiency (22) management purposes (15)
Ratios used: inventory turnover/ account
receivable days/ accounts payable days/
total asset turnover/ net asset turnover Cash flow statement analysis
Rates of return and profitability analysis Definition of accounting (1) ACCOUNTING Accounting books Accounting process Methods of Financial Accounting bookkeeping statements information (the products of the accounting process) Source documents Single entry Balance sheets Financial bookkeeping (16) Income accounting (2) statements Management Transactions are (2.1- definition Double entry Cash flow accounting recorded in a journal daily bookkeeping statements Tax accounting 2.2 – examples) (8) (Recording)  Definition (17) Books of original  Advantages (18) (Journals) (3) Periodically, data are 3.1 – definition transferred in a ledger (9) (Classifying) 3.2 - examples
Purchase day book/ Cash Act as preliminary check book/ Sales day book/ on accounts before
Purchase return day book producing final accounts (10) 3. 3 – purpose Ledgers (4) (Summarizing) Including all At the end of the fiscal year, financial statements Accounts (5) (final accounts) are Trial balance (6) prepared (11) Final accounts (Financial (Interpreting) - Balance sheets (13) statements) (7) - Income statements (14) - Cash flow statements (15) 3.1 – definition of journals 3.2 – examples
3.3 – purposes of keeping these books
8. Transactions are recorded in a journal daily
8.1. What do accountants have to do daily? – They have to record all economic activities in a journal.
8.2. Which accounting book are daily transactions recorded? ACCOUNTING INFORMATION
https://courses.lumenlearning.com/boundless-business/chapter/accounting-information/
https://accounting-simplified.com/financial/introduction/types-of-accounting/
The financial accounting information must be correct, complete, and logical and compliable (compliant) Definition of taxation (1) TAXATION Types of taxes Functions of taxation Tax avoidance Tax evasion Based on what Primary function: to raise Definition (19) Definition (28) imposed taxes: money for the government Tax avoidance by individuals Tax evasion by individuals: + corporate income tax (2) spending (14)
+ Employees: receiving perks (20) self-employed people / people + personal income tax (3) Different types of taxes have
Known as loopholes in the tax law + customs duty (4) different functions: (21) with part time jobs (29) + excise tax (5)
+ Functions of income taxes (15)
+ Investing a part of income on Tax evasion by firms + payroll tax (6) - Redistribution of income
pension plans/ insurance policies/ Making false declarations on + inheritance tax (capital - Encouraging capital other investments – (22) taxable incomes. transfer tax) (7) investment
Known as tax shelters (23) + capital gain tax (8) + Functions of excise tax (16) + doing charity (24) + VAT (9) - To restrict the consumption Tax deductibles (25) Based on tax rates of some special G &S Tax avoidance by companies + progressive taxes (10)
+ Functions of customs duty (17)
Reducing the tax bills to a legal + Regressive taxes (11) - To protect the domestic minimum (26) Based on paying tax production and ensure jobs
+ bringing forward the capital manner for local people expenditure + direct taxes (12) + Function of payroll tax (18)
+ applying LIFO methods to define + indirect taxes (13) - To ensure social security COGS and medicare INTERNATIONAL BUSINESS
Advantages & Disadvantages
Theories of absolute advantage Trade barriers
Measurements of international
& of comparative advantage trade Advantages to exporting Theory of absolute Trade barriers (7) Balance of payments: (13) countries (1) advantage (5)
- tariffs: (8) taxes on imports + financial account (14) - money accrues to exporting + of Adam Smith
- quotas: (9) quantity restrictions + capital account (15) countries
+ produce what is of the greatest
- subsidy: (10) a sum of money + current account (16) - increased production advantage provided by a government or + balance of trade (17) - more employment + there is international public fund to a person or - increased market share for specialization organization for a specific exporting companies purpose
Gs encourage exports by: (2) Theory of comparative
- embargo: (11) an order by a - Providing marketing advantage (6) government or international information + of David Ricardo body prohibiting trade with a - Establishing trade missions
+ produce & export what can be country - Subsidizing exports produced more efficiently Justifications (12) - Providing tax incentives
+ mutually beneficial trade arises - to protect domestic Advantages to importing when one country has a employment countries (3) comparative advantage - to protect relatively young - revenue by imposing tariffs domestic industries - more choice of goods
- to protect firms and industries - lower prices due to more
that produce goods and services competition
vital to the social security and Disadvantages to national defense importing countries (4) - to prevent the country from - declined domestic production depending on imports
- more competition from foreign
- to allow greater reliance on producers domestic production.
BANKING & CENTRAL BANKING THE CENTRAL BANK COMMERCIAL BANKS OTHER FINANCIAL MONEY INSTITURIONS Functions of the central Seven main functions of Savings institutions Definition bank commercial banks: Personal trusts Four functions:
+ To serve as the government’s 1. Accepting deposits Insurance company + medium of exchange banker 2. Giving loans + measure of value + To act as the banker of the 3. Overdraft + store of value banking system 4. Discounting of Bills of + standard of deferred payment
+ To regulate the monetary system Exchange Difference between:
for both domestic and international 5. Investment of Funds  Commodity money policy goals 6. Agency Functions + Examples of gold coins or
+ To issue the nation’s currency. 7. Miscellaneous Functions silver coins Monetary policy + the purchasing power (the  Tools of monetary policy monetary value is equal the + reserve requirement intrinsic material value + discount rate  Token money + open market operation + Examples of metal coins, paper notes, … + the purchasing power exceeds
greatly the intrinsic material value.