Extouch triangle: Difference between revisions

From formulasearchengine
Jump to navigation Jump to search
en>Brad7777
added catgeory triangles
 
en>David Eppstein
→‎See also: rm redlink per WP:SEEALSO
Line 1: Line 1:
Alyson is the name people use to contact me and I believe it seems quite great when you say it. Since I was eighteen I've been operating as a bookkeeper but quickly my wife and I will start our own company. For many years she's been residing in Kentucky but her husband wants them to transfer. What I adore doing is soccer but I don't have the time lately.<br><br>My weblog [http://www.publicpledge.com/blogs/post/7034 free psychic readings] tarot [http://www.010-5260-5333.com/index.php?document_srl=1880&mid=board_ALMP66 accurate psychic readings]; [http://165.132.39.93/xe/visitors/372912 just click the next website page],
{{accounting}}
The '''financial result''' is the difference between [[earnings before interest and taxes]] and [[earnings before taxes]]. It is determined by the earning or the loss which results from financial affairs.  
 
== Interpretation ==
For most industrial companies the financial result is negative, as the interest charged on borrowing generally exceeds income from investments (dividends). If a company records a positive financial Result over several periods, then one has to ask how much capital is invested at which interest rate, and if this capital would not bear a greater yield if it were invested in the company's growth. In case of constant, positive financial results a company also has to deal with increasing demands for special distributions to its shareholders.
 
== Calculation formula ==
In mathematical terms financial result is defined as follows:
 
<math> \textstyle{\begin{align}\mbox{Financial result } & =  \mbox{ Interest income} \\ & - \mbox{ Interest expense} \\ & \pm \mbox{ Write-downs/write-ups for financial assets} \\ & \pm \mbox{ Write-downs/write-ups for marketable securities} \\ & + \mbox{ Other financial income and expenses}\end{align}}</math>
 
== Advantages ==
The advantages of the use of financial result as a [[key performance indicators|key performance indicator]]
 
* The financial result provides information about financing costs.
* Information may be gained about non-consolidated companies.
 
financial result =
                  + interest income
                  - interest expenses
                  +/- write up and write down for financial assets
                  +/- write down and write up for marketable securities
                  +/- other financial income and expenses
 
== Disadvantages ==
The disadvantages of the use of financial result as a [[Key performance indicators|Key performance indicator]]
 
* Operating components may be included in the financial result (e.g.: the income from financing activities).
* Investment income as a component of the financial result does not provide any information on the risk inherent in this investment.
* The financial result may vary strongly over time.
 
== References ==
* Wiehle, Ulrich, Henryk Deter, Michael Rolf, Michael Diegelmann, Peter Noel Schomig. ''100 IFRS Financial Ratios'' (Cometis AG), 2005, ISBN 978-3-9809461-7-9
 
[[Category:Financial terminology]]
[[Category:Financial ratios]]
 
 
{{finance-stub}}

Revision as of 22:43, 21 December 2013

Template:Accounting The financial result is the difference between earnings before interest and taxes and earnings before taxes. It is determined by the earning or the loss which results from financial affairs.

Interpretation

For most industrial companies the financial result is negative, as the interest charged on borrowing generally exceeds income from investments (dividends). If a company records a positive financial Result over several periods, then one has to ask how much capital is invested at which interest rate, and if this capital would not bear a greater yield if it were invested in the company's growth. In case of constant, positive financial results a company also has to deal with increasing demands for special distributions to its shareholders.

Calculation formula

In mathematical terms financial result is defined as follows:

Advantages

The advantages of the use of financial result as a key performance indicator

  • The financial result provides information about financing costs.
  • Information may be gained about non-consolidated companies.

financial result =

                  + interest income
                  - interest expenses
                  +/- write up and write down for financial assets
                  +/- write down and write up for marketable securities
                  +/- other financial income and expenses

Disadvantages

The disadvantages of the use of financial result as a Key performance indicator

  • Operating components may be included in the financial result (e.g.: the income from financing activities).
  • Investment income as a component of the financial result does not provide any information on the risk inherent in this investment.
  • The financial result may vary strongly over time.

References

  • Wiehle, Ulrich, Henryk Deter, Michael Rolf, Michael Diegelmann, Peter Noel Schomig. 100 IFRS Financial Ratios (Cometis AG), 2005, ISBN 978-3-9809461-7-9


Template:Finance-stub