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Income Statement from Annual Report vs Excel Entry

Questions › Category: Financials Quadrant › Income Statement from Annual Report vs Excel Entry
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SG_Daniel asked 1 year ago
Hi Victor, Below is the Income Statement from an annual report. (1) Revenue: 79.8m
(2) Cost of sales: (42.5m)
(3) Gross profit: 36.2m
(4) Other Income: $0.364m
(5) General & administrative expenses: (6.3m)
(6) Other expenses: (2.3m)
(7) Finance costs: (1.5m)
(8) Profit before income tax: 26.5m
(9) Income tax expense: (7.4m)
(10) Profit for the year: 19.2m
(11) Other comprehensive income, net of tax (Exchange differences on translation): (4.5m)
(12) Total comprehensive income for the year: 14.7m From the Notes to Financial Statements,
(4) Other Income = Foreign exchange gain - net, Interest income, Others
(6) Other expenses = Loss on disposal of property, plant & equipment - net, Listing expenses, Others
(7) Finance costs = Interest expense on Finance leases/Bank borrowing, Imputed interest on liability component of convertible loans Can you advise on which are the above items I should input into the excel spreadsheet which you have provided?
1. For Revenue, do I need to include (4) and (11) beside (1)?
2. For SGA Expenses, do I need to include (6) and (7) beside (5)?
3. For Extraordinary Items (+/-), which of the above items should I include here?
6 Answers
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SG_Daniel answered 1 year ago
Victor, After going through the video again, here is what I've done and pls advise if I have got it correctly. For revenue: I've used (1) only.
For SGA Expenses, I've used (5) only.
For Extraordinary Items (+/-), I've used (4), (6), (7) & (11).
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Victor Chng Staff answered 1 year ago
Hi Daniel,  
  1. For Extraordinary Items: used 4 and 6 only 
  2. Ignore other comprehensive income and total comprehensive income
  3. The rest are all correct. Keep up the good work :)
   
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SG_Daniel answered 1 year ago
Victor, Thanks for the clarification. One more question. The Income Statement has these 2 items:
  1. Profit (loss) attributable to: [$22.189m]
    • Owners of the Company [22.199m]
    • Non-controlling interests [-10.1K]
  2. Total comprehensive income attributable to: [26.885m]
    • Owners of the Company [26.900m]
    • Non-controlling interests [-15.6K]
Since you have advised to ignore comprehensive income, am I correct to use 22.189m for row 37 of Excel spreadsheet (Equity Attributable to Shareholders)?    
Victor Chng Staff replied 1 year ago

Hi Daniel,

You should use Profit attributable to owners of the company, which is 22.199m.

SG_Daniel replied 1 year ago

Got it.

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SG_Daniel answered 1 year ago
Victor, Pls advise if I've calculated Current Debt & Total Debt correctly. Current Liabilities (CL)
  1. Bank borrowing
  2. Trade & other payables
  3. Current portion of finance leases
  4. Income tax payable
Non-Current Liabilities (NCL)
  1. Finance leases
  2. Notes payable
  3. Provisions
  4. Deferred tax liabilities
  5. Other non-current liabilities
Current Debt = CL-1 Total Debt = Current Debt + NCL-2 I wonder if NCL-2 (Finance leases) should be included in Total Debt as Finance leases includes leased equipment, motor vehicles.
SG_Daniel replied 1 year ago

Sorry. I’m referring to NCL-1.

Victor Chng Staff replied 1 year ago

Current Debt is bank borrowing
NCL debt is notes payables

Total debt is bank borrowing + notes payables

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SG_Daniel answered 1 year ago
Victor, Regarding row 29 of Financial Analysis Excel spreadsheet (Trade Payables), it's referring to only Trade Payables (Current) only, right?
Victor Chng Staff replied 1 year ago

Yes just take current trade & other payables

SG_Daniel replied 1 year ago

Do I need to include Income Tax Payable which is under Current Liabilities for row 29?

Victor Chng Staff replied 1 year ago

Tax payable is not trade payables, so don’t include it.

SG_Daniel replied 1 year ago

Noted with thanks.

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SG_Daniel answered 1 year ago
Victor, In 2020, the income statement has a new entry "Allowance for expected credit loss on trade and other receivables". In the notes, this new entry was to account for any receivables being written-off as its debtors are in severe financial difficulty because of COVID-19 situation. As such, I have included this entry under Extraordinary Items. Let me know if I have done it correctly.
Victor Chng Staff replied 1 year ago

Hi Daniel,

I need to know the business to assess if it is a one-off or recurring item. Can you point me to the company’s annual report.

SG_Daniel replied 1 year ago

Victor, I do not know how to share the link here with you.

Pls refer to Geo Energy Resources (listed on SGX) for AR 2020, 2021 & 2022.

This entry was added when COVID-19 hits. It does not have this entry before AR 2020.

Victor Chng Staff replied 1 year ago

Hi Daniel,

It seemed like a recurring item, appearing for a few years. To be conservative, I will not take it as an exceptional item.

This company is a cyclical business; note that the AQ method is more suitable for recurring business. For cyclical business, you may have to use other valuation methods instead if PE.

SG_Daniel replied 1 year ago

Noted and thanks.