Financial Statements & Accounting — 55 Terms Defined

Inventory Financial Statements & Accounting ₹ crore Goods held for sale, work in progress, and raw materials, carried at the lower of cost and net realisable value. Inventory Days = Average Inventory / Cost of Goods Sold x 365

Investing Cash Flow Financial Statements & Accounting ₹ crore The net cash used in or generated by buying and selling long-term assets and investments during a period. Investing Cash Flow = Proceeds from Asset Sales + Investment Income - Capital Expenditure - Acquisitions - Investments Made

Lease Liability Financial Statements & Accounting ₹ crore The obligation to make future lease payments, recognised on the balance sheet along with a corresponding right-of-use asset. Lease Liability = Present Value of Remaining Lease Payments, discounted at the incremental borrowing rate

Long-Term Debt Financial Statements & Accounting ₹ crore Borrowings repayable more than twelve months after the balance sheet date, such as term loans and debentures. Debt-to-Equity Ratio = Total Debt / Shareholders' Equity

Net Profit Financial Statements & Accounting ₹ crore The profit remaining after every expense, including interest and tax, has been deducted from income. Net Profit = Profit Before Tax - Tax Expense

Non-Controlling Interest Financial Statements & Accounting ₹ crore The share of a subsidiary's equity and profit that belongs to shareholders other than the parent company. Profit Attributable to Owners of the Parent = Consolidated Net Profit - Profit Attributable to Non-Controlling Interests

Non-Current Assets Financial Statements & Accounting ₹ crore Assets a company expects to hold and use for more than twelve months, such as plant, buildings, intangibles and long-term investments. Non-Current Assets = Property, Plant and Equipment + Capital Work in Progress + Intangibles + Long-Term Investments + Other Non-Current Assets

Non-Current Liabilities Financial Statements & Accounting ₹ crore Obligations not due for settlement within twelve months, principally long-term borrowings, lease liabilities and deferred tax. Non-Current Liabilities = Long-Term Borrowings + Non-Current Lease Liabilities + Deferred Tax Liabilities + Long-Term Provisions

Notes to Accounts Financial Statements & Accounting qualitative The detailed disclosures accompanying the financial statements that explain accounting policies and break down the summary figures. Test: the note forms an integral part of the financial statements and is covered by the audit opinion

Operating Cash Flow Financial Statements & Accounting ₹ crore The cash generated by a company's core business activities during a period, after working capital movements and taxes paid. Operating Cash Flow = Net Profit + Non-Cash Charges - Increase in Working Capital - Taxes Paid

Operating Expenses Financial Statements & Accounting ₹ crore The costs of running the business that are not direct costs of production, such as employee benefits, selling costs and administration. Operating Expenses = Employee Benefits + Selling and Distribution + Administrative and Other Expenses

Operating Profit Financial Statements & Accounting ₹ crore Profit from the core business after all operating costs including depreciation, but before interest and tax. Operating Profit (EBIT) = Revenue - Operating Expenses - Depreciation and Amortisation

Other Income Financial Statements & Accounting ₹ crore Income earned outside the company's main operations, such as interest, dividends received, rent or gains on asset sales. Other Income = Total Income - Revenue from Operations

Profit and Loss Statement Financial Statements & Accounting ₹ crore A statement of revenue earned and costs incurred over a period, ending in the profit or loss for that period. Net Profit = Revenue + Other Income - Operating Expenses - Depreciation - Interest - Tax

Profit Before Tax Financial Statements & Accounting ₹ crore Profit after all operating and financing costs but before income tax is deducted. Profit Before Tax = Operating Profit + Other Income - Interest Expense - Exceptional Items

Property, Plant and Equipment Financial Statements & Accounting ₹ crore Tangible long-lived assets used in operations, such as land, buildings, machinery and vehicles, shown net of accumulated depreciation. Net Block = Gross Block - Accumulated Depreciation

Provision Financial Statements & Accounting ₹ crore A liability of uncertain timing or amount that is recognised in the accounts because an outflow is probable and estimable. Test: a present obligation exists, an outflow is probable, and a reliable estimate can be made; recognise the best estimate

Qualified Opinion Financial Statements & Accounting qualitative An audit opinion stating that the financial statements are fairly presented except for a specific matter the auditor identifies. Test: the auditor concludes that misstatements are material but not pervasive, or that sufficient evidence for one area could not be obtained

Reserves and Surplus Financial Statements & Accounting ₹ crore The accumulated profits retained in the business plus other reserves such as securities premium and revaluation reserve. Reserves and Surplus = Retained Earnings + Securities Premium + Other Reserves

Retained Earnings Financial Statements & Accounting ₹ crore Cumulative profits a company has kept rather than distributed as dividends, carried forward within reserves. Closing Retained Earnings = Opening Retained Earnings + Net Profit - Dividends Paid

Revenue Financial Statements & Accounting ₹ crore The income a company earns from its principal business activities during a period, before any costs are deducted. Revenue = Units Sold x Average Selling Price, summed across products and services

Revenue Recognition Financial Statements & Accounting qualitative The accounting rules determining when and how much revenue a company may record from a contract with a customer. Test: recognise revenue when control of the goods or services transfers to the customer, in the amount expected to be received

Securities Premium Financial Statements & Accounting ₹ crore The reserve holding the amount received on share issues in excess of face value. Securities Premium = (Issue Price - Face Value) x Number of Shares Issued

Segment Reporting Financial Statements & Accounting qualitative Disclosure of revenue, results and assets broken down by the business or geographic segments management uses to run the company. Test: segments are reported on the basis used internally by the chief operating decision maker, above prescribed size thresholds