Category: Money Tips Date: 2007-03-23
Shanghai University of Finance Kinder Ring
Accounts receivable and inventory to analyze the impact on profits, first of all should be clear that a basic component of profits. Profit itself is a broad concept. It has main business profit, operating profit, net profit distributable profits, undistributed profits of small different concepts, of course, can be further subdivided. Under normal circumstances, the main business profit is the company's main source of profits. Accounts receivable and inventory that primarily affects main business profit targets, of course, does not rule out the existence of a number of companies outside the business activities of accounts receivable.
Accounts receivable can affect the profit
Accounts Receivable said the company has delivered products or provide services, but not yet received the corresponding funds or monetary measure of labor and property. Its changes can directly lead to changes in main business income, thus affecting profitability. Therefore, the master's accounts receivable analysis methods are conducive to accurate information on the company annual report information, for identifying whether the company manipulated the profit of great significance.
Analysis of accounts receivable is mainly to confirm the actual data in the report whether the company in the principles of objectivity and the relevant provisions of the accounting system. If the company at the end of this year false invoices, then the increase in accounts receivable in the same time also increase revenue, next year's Youyi quality does not meet requirements, such as the name of the red back. This makes this year's operating income in order to achieve profits inflated inflated. And if the company will have been lost assets transferred to other receivables subjects, resulting in a loss is not reflected, you can also inflated profits. Another example is the company should be based on the length of aging of receivables as required provision for bad debt reserves, less or more account for bad debts account Waldo can increase or decrease profits. Many enterprises have become aware of some old accounts receivable bad debt, but in order not to write-off of inflated profits, or to conceal profits make more reserves.
Through the following ways to identify the use of accounts receivable to manipulate the profit situation.
1, if the end of the year and the accounts receivable generated corresponding to the sudden nature of revenue, should be their further understanding, to determine whether the enterprise use of the above-mentioned techniques; for the old accounts receivable, in the analysis should be the excluded; and other accounts receivable balances should not be too large, or from other receivables and other accounts payable schedules to start to identify whether there is manipulation of the profit situation.
2, using two indicators to determine: credit ratio = accounts receivable / main business income, if compared to the past with the normal changes in the rate higher or larger, it indicates that the company's main business income is mainly dependent on receivables section, or the main business income of great uncertainty, the company may face significant risks of bad debts. At this point, depends on the other ratios: Accounts receivable recovery ratio = sales of goods and rendering of services received in cash / average accounts receivable, if the ratio is very low, it indicates that the actual rate of return of accounts receivable are is very low, this case may be fictitious companies had sales.
Inventory can affect the profit
Means that the company stock in the normal course of business to hold the production in preparation for sale of finished products or commodities, or to sell is still in the production process in the product, or labor in the production process or providing the materials consumed in the process, materials , including raw materials, product, stock commodity, Low-Value Consumable, commission processing supplies.
Generally speaking, the total inventory in the enterprise a larger share of assets, and the variety, quantity, specifications are many and mixed and difficult to verify, while the inventory cost impact can be through the main business profits, so the possibility of being manipulated by larger companies.
Identify the impact of inventories on the profit can take the following basic methods.
First, change the inventory valuation method. When stock prices are rising period, the use of LIFO is that the maximum price of the material recorded, so that current costs rise, reducing current profits; the use of a FIFO method, the lowest price of the material is recorded, so that current cost decrease and increase current profits. If the stock price at the period of decline, the opposite is true. Enterprises can take advantage of changes to inventory valuation method to adjust the current level of profits. But in 2007 the formal implementation of new accounting standards, eliminating last-in first-out method to require all using FIFO method, so that all enterprises are reflected in the current cost of the actual historical cost, rather than man-made adjustment factor.
The second is improper inventory valuation. For example, by raising the finished product storage unit, multi-turn cost of goods sold less about profits; not addressed promptly, degenerate scrap, Zhicijiagao, long-term backlog of inventory, less inventory impairment to mention, inflated profits; the use of material costs differences in adjusted profit, depending on the needs of casual carry-over of profits; physical exercise and Accounts accounting divorced from the actual finished product a few years ago has been issued, and some even stay dead receivable has been formed, but have not received payment due to the accounting does not make any reflection and processing, resulting in the recognition of sales revenue can not be confirmed, inventory seriously untrue, may be inflated profits.
