Monthly Reports

Accountants' Workshop

Parts of Monthly Report

Balance

Sheet Profit and Loss Statement Cash Flow Benchmarks

Balance Sheet and Profit and Loss

Balance Sheet 01 02 03 04 05 06 07 08 09 10 Cash and cash equivalents WGL 1 Fund Investments A/R Trade A/R Company Other assets Inventory Property, plant and equipment Accumulated depreciation Total assets Assets Current Assets Last Mth % #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0 #DIV/0! Month Budget % #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Company
Balance Sheet 11 12 13 14 A/P Trade A/P Company Other liabilities Equity

Month
Liabilities Current

Aug
Liabilities Last Mth % #DIV/0! #DIV/0! #DIV/0! #DIV/0! Received Resp. Inform To do File

15 Total liabilities and equity Cumulative Budget % #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

0 Current CoS month 0 0 0 0 0 0 0 0 0 0 0

#DIV/0! Current CoS cum. Current GP % month #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0 #DIV/0! 0 0 #DIV/0! #DIV/0! #DIV/0! Current GP % cum. #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Profit and Loss Current 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Sales Machines (SBF 1) 0 Sales Machines (SBF 2) 0 Sales Machines (SBF 3) 0 Sales Machines (SBF 4) 0 Sales Spare Parts (SBF 5.1) 0 Sales Rental (SBF 5.2) 0 Sales Miscellaneous 0 Sales 0 less cash discounts 0 Net sales without intercompany 0 Intercompany sales 0 Total net sales 0 Cost of sales 0 Intercompany purchases in CoS 0 Gross Profit 0 Personnel 0 Selling 0 Administration 0 Plant and equipment 0 Research and development 0 CoS allocation (only production) 0 Selling and administration 0 In % of sales #DIV/0! Operating profit 0 In % of sales #DIV/0! Other income 0 Other expenses 0 Profit before tax 0 In % of sales #DIV/0! Taxes 0 Profit after tax 0

Last Yr % #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Current

0 0 0 0 0

Last Yr % #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Company / Stamp

Date

0 #DIV/0! 0 #DIV/0!

#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Signature

Balance Sheet
ASSETS Cash and cash equivalents Investments Accounts receivable trade Accounts receivable Intercompany Other assets Inventory Property, plant and equipment

Cash and Cash Equivalents

Definition Readily available for the payment of current obligations Highly liquid Short term < 3 months Free from any contractual limits

Cash and Cash Equivalents

Examples Petty cash Checks not yet credited (not post-dated) Bank credit balance Time deposits (< 3 months) Short-term investments (< 3 months) NOT: post-dated checks, postage, travel advances

Cash and Cash Equivalents

Valuation Nominal value Amounts in foreign currency translated at exchange rate at balance sheet date (monthly) Bank debit balances may be offset if also short term

Investments
Examples Term deposits > 3 months Funds. Debt securities

government or municipal bonds corporate bonds

Equity

securities

stock

Investments
Valuation Purchase cost including all fees

for debt securities discount or premium must be amortized over maturity of debt

Reduction

in value recognized only if permanent Current can be liquidated at any time to meet short-term obligations Long-term expected to be a permanent investment

Accounts Receivable Trade

Definition Amounts owed by customers for goods sold and services rendered as part of normal business operations Recognized when title passes or service rendered For a continuous service such as rental, monthly billing

Accounts Receivable Trade

Examples Invoices for sale of machines, spare parts, service, rental Notes, drafts, post-dated checks NOT: receivables for advance payments, deposits, interest, rent, etc.

Accounts Receivable Trade

Valuation Amounts in foreign currency translated at exchange rate at balance sheet date (monthly) Net of discounts normally taken Net of allowance for doubtful accounts to state accounts at amount expected to be collected Notes without interest are discounted

Accounts Receivables
Includes

trade accounts as well as other receivables (charges, interest, dividends) Includes all A/R affiliates Valuation same as other A/R

Other Assets
Definition All assets not included in other categories

Other Assets
Examples Other A/R

Taxes Interest Rent Advances Deposits

Prepaid

expenses Intangible assets

Patents NOT Standard Software

Other Assets
Valuation Nominal value Historical cost net of amortization

Inventory
Definition Goods which are

held for sale in the normal course of business in the process of production for sale or consumed in the production of goods or services for sale

Goods

in transit where title has passed to receiver

Inventory
Examples Machines, spare parts

in warehouse in transit on consignment at customer's demo machines with sales reps used machines for resale

NOT

machines for rent

Inventory
Valuation Cost including freight in, duty, handling, less purchase discounts taken Cost flow assumptions:

specific identification FIFO (first in, first out) LIFO (last in, first out) average cost

Net

of allowance for slow-moving and obsolete stock

Property, Plant and Equipment

Definition Assets which are used to produce goods or provide services Useful life longer than one year

Property, Plant and Equipment

Examples Land and buildings including improvements thereto Machinery and equipment for production Machines for rent Office and other equipment Vehicles Building under construction

Property, Plant and Equipment

Valuation Historical cost all costs necessary to bring the asset to its location in working condition, i.e. freight, installation costs Net of depreciation to allocate the cost over the useful life of the asset

useful life and method of depreciation must be reasonable tax lives and depreciation methods may also be used

Balance Sheet
LIABILITIES AND EQUITY Accounts payable trade Accounts payable Intercompany Other liabilities Equity

Accounts Payable Trade

Definition Amounts owed to suppliers for goods, supplies and services purchased as part of normal business operations Recognized when title passes or service rendered

Accounts Payable Trade

Examples Invoices for purchase of machines, spare parts, supplies, services (freight, utilities, legal fees, etc.) NOT: payables for taxes, payroll, accrued expenses, etc.

Accounts Payable Trade

Valuation Amounts in foreign currency translated at exchange rate at balance sheet date (monthly) Net of discounts normally taken Notes without interest are not discounted

Accounts Payable Intercompany

Includes

trade accounts as well as other payables (charges, interest, dividends) Includes all A/P affiliates Valuation same as other A/P

Other Liabilities
Definition All liabilities not included in other categories

Other Liabilities Examples

Other A/P Taxes Payroll expenses
Salaries and wages Payroll deductions Vacation pay Bonus agreements Postretirement benefits

Bank loans Accruals Taxes Payroll expenses Year-end audit Guarantee and warranty costs

Other Liabilities
Valuation Nominal value Best estimate of liability

Equity
stock legal capital provided by shareholders at par value Additional paid-in capital capital provided by shareholders above par value, capitalized retained earnings Retained earnings accumulated undistributed earnings
Capital

Profit & Loss Statement

Sales

by Product Line Sales miscellaneous Cost of sales Selling and administration costs

Personnel Selling Administration Plant and equipment Research and development

Other

income Other expenses

Sales by SBF
Sale

is recognized when title has passed or service rendered Sale of new machines, spare parts, services, rental Only Company products Net of rebates and returns

Sales Miscellaneous
Sale

of non-Company products Sale of used machines Sale of scrap or recycled material NOT items which are not part of the normal business "Other income" such as interest, rent of property, etc. NOT freight charged out to be deducted from freight costs NOT warranty credit from Company to be deducted from warranty cost

Cost of Sales
Purchase

cost of the goods sold in the period Same costs as included in inventory purchase costs plus freight and duty Includes all inventory adjustments changes to allowance for slow-moving or obsolete goods Depreciation for rental machines Workshop and tools NOT warranty credit from Intercompany to be deducted from warranty cost

Cash Discounts
Only

cash discounts which cannot be allocated to Product Line Rebates and other credits should be allocated to Product Line

Intercompany Sales and CoS

Intercompany

sales are all sales or charges to any affiliate Intercompany cost of sales is all goods purchased from any affiliate All transactions with affiliates must be included in either of these categories

Personnel Costs
Salaries

and wages Employer costs for social security Commissions Bonus, profit sharing Vacation pay Temporary employees Pension costs accrual or actual cost Other payments to or for employees meal coupons, life insurance, training

Selling Costs
Advertising

ads, brochures, gifts to

customers Exhibition costs Commissions to third parties Customer training less amount charged to customer Travel and entertainment Vehicle costs incl. insurance and taxes Freight and packing less amount charged to customer Guarantee costs cost of parts and material, less warranty credit from Intercompany

Administration Costs
telephone, fax, postage Office material, printed forms and stationery Trade literature Leasing and repair of office machines Bank and collection charges A/R write-offs, incl. change in allowance Consulting legal, audit EDP Insurance except vehicle insurance Cost of hiring personnel Other expenses, i.e. dues, patents
Communication

Plant and Equipment Costs

Rent

of premises of building and equipment on building and equipment

Repair

Cleaning Depreciation

Utilities

electricity, heating, water, sewer

security

Building

Other Income and Expenses

Items which are not part of the normal business operations: Gain or loss on sale of fixed assets Interest Gain or loss on investments Currency exchange gain or loss Extraordinary depreciation of assets Donations

Inflation Accounting
Incercompany

adjusts for inflation where rate is > 10%. Subtract inflation rate from trend to prior year in %. Alternative: state budget and monthly P&L figures in DM. If assets are restated in local accounts, show inflation adjustment as part of retained earnings.

Benchmarks
Units

sold Number of employees (jobs) Days sales in inventory Days sales outstanding Accounts receivable overdue > 30 days Quick ratio Capital needs Yield on equity Return on investment

Units Sold
Should

agree with Product Line

report New Intercompany machines only

Number of Employees
Number of jobs two half-time persons = 1 job

Days Sales in Inventory

Compares

the average of the inventory figures for the last 12 months with the total cost of goods sold for the last 12 months Expressed in days, not months Cost of sales is reduced by costs for (depreciation for rental machines)

Days Sales in Inventory

Formula: Sum of inventory values for last 12 months divided by sum of cost of sales (without depr. for rental) for last 12 months times 30
Aug CY Jul CY Jun CY May CY Apr CY Mar CY Feb CY Jan CY Dec PY Nov PY Oct PY Sep PY Total Inventory Cost of Sales 2.218.515 230.445 2.252.132 273.464 2.048.066 373.421 2.106.589 263.974 2.182.664 243.113 2.011.131 371.913 1.930.058 309.371 2.002.905 219.318 2.125.011 523.057 1.957.428 389.982 1.712.267 364.529 1.678.033 394.320 24.224.798 3.956.907

24,224,798 / 3,956,907 * 30 = 184 days

Days Sales Outstanding

Compares

the average of the accounts receivable (A/R trade and Intercompany) figures for the last 12 months with the total sales for the last 12 months Expressed in days, not months

Days Sales Outstanding

Formula: Sum of accounts receivable values for last 12 months divided by sum of sales for last 12 months times 30
Aug CY Jul CY Jun CY May CY Apr CY Mar CY Feb CY Jan CY Dec PY Nov PY Oct PY Sep PY Total A/R 2.726.403 2.893.664 2.956.111 2.777.851 2.998.173 2.808.770 2.631.016 2.583.081 3.070.087 3.397.432 3.432.275 3.148.192 35.423.056 Sales 428.088 489.844 697.221 463.307 462.779 708.007 611.802 475.118 557.376 730.824 657.226 682.895 6.964.487

35,423,056 / 6,964,487 * 30 = 148 days

A/R Overdue > 30 days

Accounts

receivable trade which are overdue more than 30 days Based on due date, not invoice date

Quick Ratio
Liquid

assets / current liabilities Liquid assets are cash and cash equivalents, investments ), A/R Trade, A/R Intercompany and other assets Current liabilities are A/P trade, A/P Intercompany and other liabilities

Capital Needs
Average

total monthly cash payments Payments include purchase of goods and services, all expenses, taxes, payment of loans, purchase of fixed assets, etc. Sum of cash outflow per month for the last 12 months / 12

Yield on Equity
Profit

after tax as % of average total capital Calculated on a rolling 12-month basis

Yield on Equity
Formula: Sum of profit after tax for last 12 months divided by average total equity for last 12 months
Aug CY Jul CY Jun CY May CY Apr CY Mar CY Feb CY Jan CY Dec PY Nov PY Oct PY Sep PY Total Profit after Tax 147.599 -70.295 394.689 324.416 153.287 372.843 16.939 286.315 511.764 419.046 384.692 701.235 3.642.530 Equity 50.764.829 50.617.230 50.687.525 50.292.836 49.968.420 49.815.133 49.442.290 49.425.351 49.139.036 48.627.272 48.208.226 47.823.534 594.811.682

3,642,530 / 594,811,682 * 12 = 7.3 %

Return on Investment
Operating

profit as % of total assets Calculated on a rolling 12-month basis

Return on Investment
Formula: Sum of operating profit for last 12 months divided by total assets

Aug CY Jul CY Jun CY May CY Apr CY Mar CY Feb CY Jan CY Dec PY Nov PY Oct PY Sep PY Total

Operating Profit 452.918 -104.199 552.034 449.672 194.966 546.573 -295 419.792 -457.530 684.190 540.692 1.097.025 4.375.838

Total Assets 53.817.091

4,375,838 / 53,617,091 = 8.2 %