Financial statement analysis consists of 1) reformulating reported financial statements, 2) analysis and adjustments of measurement errors, and 3) financial ratio analysis on the basis of reformulated and adjusted financial statements. The two first steps are often dropped in practice, meaning that financial ratios are just calculated on the basis of the reported numbers, perhaps with some adjustments. Financial statement analysis is the foundation for evaluating and pricing credit risk and for doing fundamental company valuation.

1) Financial statement analysis typically starts with reformulating the reported financial information. In relation to the income statement, one common reformulation is to divide reported items into recurring or normal items and non-recurring or special items. In this way, earnings could be separated in to normal or core earnings and transitory earnings. The idea is that normal earrings are more permanent and hence more relevant for prediction and valuation. Normal earnings are also separated into net operational profit after taxes (NOPAT) and net financial costs. The balance sheet is grouped, for example, in net operating assets (NOA), net financial debt and equity.

2) Analysis and adjustment of measurement errors question the quality of the reported accounting numbers. The reported numbers can for example be a bad or noisy representation of invested capital, for example in terms of NOA, which means that the return on net operating assets (RNOA) will be a noisy measure of the underlying profitability (the internal rate of return, IRR). Expensing of R&D is an example when such investment expenditures are expected to yield future economic benefits, suggesting that R&D creates assets which should have been capitalized in the balance sheet. An example of an adjustment for measurement errors is when the analyst removes the R&D expenses from the income statement and put them in the balance sheet. The R&D expenditures are then replaced by amortization of the R&D capital in the balance sheet. Another example is to adjust the reported numbers when the analyst suspects earnings management.

3) Financial ratio analysis should be based on regrouped and adjusted financial statements. Two types of ratio analyses are performed: 3.1) Analysis of risk and 3.2) analysis of profitability:

3.1) Analysis of risk typically aims at detecting the underlying credit risk of the firm. Risk analysis consists of liquidity and solvency analysis. Liquidity analysis aims at analyzing whether the firm has enough liquidity to meet its obligations when they should be paid. A usual technique to analyze illiquidity risk is to focus on ratios such as the current ratio and interest coverage. Cash flow analysis is also useful. Solvency analysis aims at analyzing whether the firm is financed so that it is able to recover from a losses or a period of losses. A usual technique to analyze insolvency risk is to focus on ratios such as the equity in percentage of total capital and other ratios of capital structure. Based on the risk analysis the analyzed firm could be rated, i.e. given a grade on the riskiness, a process called synthetic rating.

3.2) Analysis of profitability refers to the analysis of return on capital, for example return on equity, ROE, defined as earnings divided by average equity. Return on equity, ROE, could be decomposed: ROE = RNOA + (RNOA - NFIR) * NFD/E, where RNOA is return on net operating assets, NFIR is the net financial interest rate, NFD is net financial debt and E is equity. In this way, the sources of ROE could be clarified.

Insights from financial statement analysis could be used to make forecasts and to evaluate credit risk and value the firm's equity. For example, if financial statement analysis detects increasing

superior performance ROE - kE > 0 over the period of financial statement analysis, then this trend could be extrapolated into the future. But as economic theory suggests, sooner or later the competitive forces will work - and ROE will be driven toward kE. Only if the firm has a sustainable competitive advantage, ROE - kE > 0 in "steady state".

Financial analysis is the selection, evaluation, and interpretation of financial data, along with other pertinent information, to assist in investment and financial decision-making. The analyst draws the financial data needed in financial analysis from many sources. The primary source is the data provided by the company itself in its annual report and required disclosures. The annual report comprises the income statement, the balance sheet, and the statement of cash flows, as well as footnotes to these statements. Certain businesses are required by securities laws to disclose additional information. Besides information that companies are required to disclose through financial statements, other information is readily available for financial analysis. For example, information such as the market prices of securities of publicly-traded corporations can be found in the financial press and the electronic media daily. Similarly, information on stock price indices for industries and for the market as a whole is available in the financial press. Another source of information is economic data, such as the Gross Domestic Product and Consumer Price Index, which may be useful in assessing the recent performance or future prospects of a company or industry. Suppose you are evaluating a company that owns a chain of retail outlets. You need financial data, but it doesn't tell the whole story. You also need information on consumer Financial ratios spending, producer prices, consumer prices, and the competition.

第二篇：财务英语

常用财务英语翻译和财会中英词典 Chapter 1

account 账户

account payable 应付账款

annual report 年度报告

assets 资产

audit 审计

auditor’s opinion 审计意见书

balance sheet 资产负债表

balance sheet equation 资产负债表等式

capital 资本

capital stock certificate 股本证明书

certified public accountant(CPA) 注册会计师

common stock 普通股

compound entry 复合分录

corporation 公司

creditor 债权人

debtor 债务人

entity 主体（会计主体）

financial accounting 财务会计

GAAP 一般公认会计原则

generally accepted accounting principles 一般公认会计原则 independent opinion 独立意见书

inventory 存货

liabilities负债

limited liability 有限责任

management accounting 管理会计

notes payable 应付票据

open account ①未清账；②赊账，指赊购和记账交易 owners’ equity 所有者权益

paid-in capital 投入资本（缴入股本）

paid-in capital in excess of par value 超面值缴入股本 partnership 合伙企业

par value 票面价值

privately accounting 企业会计

privately owned 私有公司

public accounting 公共会计

publicly owned 国有企业

reliability 可靠性

shareholders’ equity 股东权益

sole proprietorship 独资企业

stated value 股本

statement of financial condition 财务状况表

statement of financial position 财务状况表

stock certificate 股票凭证

stockholders’ equity 股东权益

transaction 交易

Chapter 2

Accounting Principle Board (APB) （美国）会计准则委员会

accrual basis 权责发生制（应计制）

AICPA 美国注册会计师协会

APB Opinions 会计准则委员会意见书

cash basis 收付实现制（现金收付制）

cash dividends 现金股利

cash flow statement 现金流量表

cost of goods sold 销售成本

cost of sales 销售成本

cost recovery 成本收回

depreciation 折旧

earnings 收益（利润）

expenses费用

Financial Accounting Standards Board (FASB) （美国）财务会计准则委员会 FASB Statement 财务会计委员会公告

fiscal year ①会计年度（财务年度）；②财政年度

income 利润（收益）

income statement利润表

interim periods 期间

International Accounting Standards Committee(IASC)国际会计准则委员会 matching 配比原则

net income 净利润

operating cycle 营业周期

operating statement 营业报表

period costs 期间费用

product costs 制造成本

profit 利润

P&L statement 损益表

recognition 确认

reinvested earnings 留存收益

results of operations 损益表

retained earnings 留存收益

retained income留存收益

revenue 收入

sales 销售额

sales revenue 销售收入

Securities and Exchange Commission (SEC)（美国）证券交易委员会

statement of cash flows 现金流量表

statement of earnings 收益表

statement of income 利润表

statement of income and retained income 损益和留存收益表 statement of operations 损益表

statement of retained income 留存收益表

statement of revenue and expenses 损益表

Chapter 3

accumulated depreciation 累计折旧

allowance for depreciation 折旧备抵账户

balance 余额

book of original entry 原始分录账簿

book value 账面价值

carrying amount 账面价值

carrying value 账面价值

charge ①费用；②赊账，指赊欠而采用记账的方式；③留置权 chart of account 会计科目表

compound entry 复合分录

continuity convention 持续经营惯例

contra account 抵减账户

contra asset 抵减资产

cost-benefit criterion 成本-效益标准

credit 贷方

cross-referencing 对照检录

data processing 数据处理过程

debit 借方

double-entry system 复式记账系统

general journal 普通日记账

general ledger 总分类账

going concern convention 持续经营惯例

journal entry 日记账分录

journalizing 记录日记账

keying of entries 分录锁定

ledger 分类账

materiality convention 重要性惯例

net book value 账面净值

posting 过账

simple entry 简单分录

source document 原始凭证

T-account T-型账户

trial balance 试算平衡表

Chapter 4

account FORMat 账户格式

accrue 应计

adjusting entries 调整分录

adjustment 调整

classified balance sheet 分类资产负债表

current assets 流动资产

current liabilities 流动负债

current ratio 流动比率

deferred credit 递延贷项

deferred revenue 递延收入

explicit transactions 明计交易

gross margin 毛利

gross margin percentage 毛利率

gross profit毛利

gross profit percentage 毛利率

implicit transactions 内含成本

multiple-step income statement 多步式利润表 operating income 营业收益

operating profit营业利润

pretax income 税前收益

profitability evaluation 获利能力评估

report FORMat 报告式

return on sales ratio 销售回报率

return on stockholders’ equity ratio 股东权益回报率 single-step income statement 单步式利润表 solvency 偿债能力

unearned revenue 未实现收入（预收账款） working capital 营运资本

working capital ratio 营运资本比率

Chapter 5

accounting cycle 会计循环

auditor 审计师Chapter 10

annuity 年金

bearer instrument

bonds 债券

callable bonds 可赎债券，可提前兑回债券

call premium 提前兑回溢价

capital lease 资本租赁（指融资租赁）

compound interest 复利

compound interest method 复利法

contingent liability 或有负债

contractual rate 合同比率

convertible bonds 可兑换债券

coupon rate 息票利率 covenant 合同条款 current yield 本期收益率