Skip to main content







Schedules of Financial Statements





When the company reports its financial statements, they usually report the full statement in the beginning and then follow it up with a detailed explanation.

Have a look at the snapshot of one of ARBL’s financial statement (balance sheet)


Each particular in the financial statement is referred to as the line item. For example the first line item in the Balance Sheet (under Equity and Liability) is the share capital (as pointed out by the green arrow). If you notice, there is a note number associated with share capital. These are called the ‘Schedules’ related to the financial statement. Looking into the above statement, ARBL states that the share capital stands at Rs.17.081 Crs (or Rs.170.81 Million). As an investor I obviously would be interested to know how ARBL arrived at Rs.17.081 Crs as their share capital. To figure this out, one needs to look into the associated schedule (note number 2). Please look at the snapshot below:


Of course, considering you may be new to financial statements, jargon’s like share capital make not make much sense. However the financial statements are extremely simple to understand, and over the next few chapters you will understand how to read the financial statements and make sense of it. But for now do remember that the main financial statement gives you the summary and the associated schedules give the details pertaining to each line item.


Key takeaways from this chapter
The Annual Report (AR) of a company is an official communication from the company to its investors and other stakeholders
The AR is the best source to get information about the company; hence AR should be the default choice for the investor to source company related information
The AR contains many sections, with each section highlighting certain aspect of the business
The AR is also the best source to get information related to the qualitative aspects of the company
The management discussion and analysis is one of the most important sections in the AR. It has the management’s perspective on the overall economy of the country, their outlook on the industry they operate in for the year gone by (what went right and what went wrong), and what they foresee for the year ahead
The AR contains three financial statements – Profit & Loss statement, Balance Sheet, and Cash Flow statement
The standalone statement contains the financial numbers of only the company in consideration. However the consolidated numbers contains the company and its subsidiaries financial numbers.

Comments

Post a Comment

Popular posts from this blog

The Chart Types we need a charting technique that displays this information in the most comprehensible way. If not for a good charting technique, charts can get quite complex. Each trading day has four data points’ i.e the OHLC. If we are looking at a 10 day chart, we need to visualize 40 data points (1 day x 4 data points per day). So you can imagine how complex it would be to visualize 6 months or a year’s data. As you may have guessed, the regular charts that we are generally used to – like the column chart, pie chart, area chart etc does not work for technical analysis. The only exception to this is the line chart. The regular charts don’t work mainly because they display one data point at a given point in time. However Technical Analysis requires four data points to be displayed at the same time. Below are some of the chart types: 1. Line chart 2. Bar Chart 3. Japanese Candlestick The focus of this module will be on the Japanese Candlesticks however before we get...
Post a Comment
Read more
The Beginner’s Guide to Technical Analysis Combining Fundamental and Technical Analysis On the left: 4H chart of EUR/USD with various technical methods applied (source: Twitter) On the right: Kandinsky horizontale (Source: Google Images) Up to this point, we’ve explored Support & Resistance, Candle Patterns, Moving Averages, Fibonacci Retracements, Oscillators, Bands, Channels and Envelopes. However, it would be too simplistic to reduce successful speculation to mere technicals. Sure, technical analysis is an easy empirical method, which is actually very useful for: Measuring market sentiment on a given asset  Timing potential entries and exits  Managing risk. However, it is rare to find a successful FX speculator that relies on technicals alone. In reality, behind successful FX speculation lies a decision making process that most likely blends technical analysis and fundamental analysis. Picture this: you are a trader for a hedge fund, ...
Post a Comment
Read more
CALL OPTIONS BASICS Breaking the Ice The options market makes up for a significant part of the derivative market, particularly in India. I would not be exaggerating if I were to say that nearly 80% of the derivatives traded are options and the rest is attributable to the futures market. Internationally, the option market has been around for a while now, here is a quick background on the same – Custom options were available as Over the Counter (OTC) since the 1920’s. These options were mainly on commodities Options on equities began trading on the Chicago Board Options Exchange (CBOE) in 1972 Options on currencies and bonds began in late 1970s. These were again OTC trades Exchange-traded options on currencies began on Philadelphia Stock Exchange in 1982 Interest rate options began trading on the CME in 1985 Clearly the international markets have evolved a great deal since the OTC days. However in India from the time of inception, the options market was facilita...
Post a Comment
Read more