CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
Analyzing Financial Statements (FS) Through SAP BOBI 4.0
a “SAP HANA” enabled solutions
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
OBJECTIVES:
To understand the essentials of finical statements, including Balance Sheet Income Statement Cash Flow
To understand the data sources of a given finical statement in a SAP system environment To understand the structure and layout of a finical statements To understand the structure calculations and formulas that are used while generating a finical statement
GOALS: Analyze , Design and Implement Dimensions and Measures ( KPI) for a finical statement
Dimension modeling KPI modeling
Analyze, Design and Implement Data Model for a finical statement Classic Star Schema SAP BW Extended Star Schema
Analyze, Design and Implement Layout and Mockup, Calculations for a finical statement
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
Learn Financial Statements (FS)
Essentials
Develop Conceptual &
Logical View of Financial
Statements
Develop Physical View of Financial
Statements
Dimension KPI’s/ Measures
Classic Star Schema
SAP BW Extended Star
Schema
Deliverables
Problem Requirements Functional Design Technical Design . . .
.
.
.
.
.
.
.
.
Report Layout, Calculations,
Formulas
Case Study – Approach and Roadmap
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
FINANCIAL STATEMENTS(FS) ESSENTIALS
BALANCE SHEET (BS):
KEY POINTS:
The Balance Sheet presents the financial picture of the enterprise on one particular day, an instant in time, the date it was written The Balance Sheet presents
What the enterprise has Today : Assets How much the enterprise owes today : Liabilities What the enterprise is worth today : Equity
The Balance Sheet reports Has Today = Owes Today + Worth Today Asses = Liabilities + Shareholders Equity
By definition, this equation must always be in balance with assets equaling the sum of liabilities and worth
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
Financial Statements(FS) Essentials
Income Statement (IS):
Key Points:
The income statement gives one important perspective of the health of a business , its profitability The income statement does not tell you whole picture about a company's financial position The Income statement report on making and selling activities of a business over a period of time The income statement documents for a specific period ( month , quarter , year) , this is the second basis equation of accounting
SALES - ( COSTS + EXPENSES) = INCOME The Income statement shows for a period all the action taken by the enterprise to either increase assets or decrease liabilities on the Balance Sheet The Income statement and Balance Sheet are inevitably linked
Example: If the enterprise's Income statement shows income, then retained earnings are increased on the Balance Sheet
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
Financial Statements(FS) Essentials
CASH FLOW(CF):
KEY POINTS:
The Cash Flow Statement tracks the movement of cash through the business over a period of time A company's Cash Flow statement is just like a check register…recording all the company’s transaction that use cash ( check) or supply cash ( deposits) The Cash Flow shows
Cash on the hand at the
start of a period + Cash Received
in the period -‐ Cash Spend in the period =
Cash on hand at the end of the period
The cash transactions that are reported in the Cash Flow statements usually has some impact to the Income Statement and Balance Sheet If no actual cash changes hands in a particular transaction, then the Cash Flow statement is not changed
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
Balance Sheet (BS) Analysis
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
Assets Liabili.es & Equity A Cash K Accounts Payable
B Account Receivable (AR) L Accrued Expenses
C Inventory M Current Portion of Debt
D Prepaid Expenses N Income Taxes Payable
E Current Assets O Current Liabilities
F Other Assets P Long Term Debt
G Fixed Assets at Cost Q Capital Stock
H Accumulated Depreciations R Retained Earnings
I Net Fixed Assets S Shareholder's Equity
J Total Assets T Total Liabilities & Equity
Balance Sheet Format - for a Given Period
KEY POINTS: Assets ( Have) - Liabilities ( Owe) = Worth ( Value to Owner) Assets = Liabilities + Worth
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
Assets Calcula.ons/ Formula
A Cash
B Account Receivable (AR)
C Inventory
D Prepaid Expenses
E Current Assets A+B+C+D
F Other Assets
G Fixed Assets at Cost
H Accumulated Depreciations
I Net Fixed Assets G-H
J Total Assets E+F+I
Balance Sheet Format - for a Given Period
Most Liquid
Least Liquid
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
Liabili.es & Equity Calcula.ons/ Formula
K Accounts Payable
L Accrued Expenses
M Current Portion of Debt
N Income Taxes Payable
O Current Liabilities K + L+M+N
P Long Term Debt
Q Capital Stock
R Retained Earnings
S Shareholder's Equity Q+R
T Total Liabilities & Equity O+P+S
Balance Sheet Format - for a Given Period
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
HOMEWORK # 1
Explain the following Balance Sheet building blocks with examples ( no story please) Identify the data sources for the following in a SAP system environment
Cash Account Receivable (AR) Inventory Prepaid Expenses Current Assets Other Assets Fixed Assets at Cost Accumulated Depreciations Net Fixed Assets
Total Assets Accounts Payable Accrued Expenses Current Portion of Debt Income Taxes Payable Current Liabilities Long Term Debt Capital Stock Retained Earnings Shareholder's Equity Total Liabilities & Equity
Assets Building Blocks
Liability Building Blocks
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
Income Statement (IS) Analysis
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
Income and Expenses Calcula.ons/ Formula
A Net Sales
B Cost of Goods Sold
C Gross Margin A - B
D Sales and Marketing
E Research and Development
F General and Administrative
G Operating Expenses D + E + F
H Income From Operations C – G
I Interest Income
J Income Taxes
K Net Income H + I - J
Income Statement Format - Between a Given Period
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
HOMEWORK # 2
Explain the following Income Statement building blocks with examples ( no story please) Identify the data sources for the following in a SAP system environment
Net Sales Cost of Goods Sold Gross Margin Sales and Marketing Research and Development General and Administrative Operating Expenses Income From Operations Interest Income Income Taxes Net Income
Income Statement Building Blocks
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
Cash Flow (CF) Analysis
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
Cash In and Cash Out Calcula.ons/ Formula
A Beginning Cash Balances
B Cash Receipts
C Cash Disbursement
D Cash From Operations B – C
E Fixed Assets Purchase
F Net Borrowings
G Income Tax Paid
H Sale of Stock
I Ending Balance A + D – E + F – G + H
Cash Flow Format – Between Periods
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
HOMEWORK # 3
Explain the following Cash Flow building blocks with examples ( no story please) Identify the data sources for the following in a SAP system environment
Beginning Cash Balances Cash Receipts Cash Disbursement Cash From Operations Fixed Assets Purchase Net Borrowings Income Tax Paid Sale of Stock Ending Balance
Cash Flow Building Blocks
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
Accrual Basis vs. Cash Basis Analysis
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
Accrual Basis vs. Cash Basis
Two major ways of running a company’s books , Accrual Basis or Cash Basis, this differs on when the company records expenses and income
CASH BASIS:
Cash basis accenting is the simplest accenting function as compare to Accrual Basis, in Cash basis accounting transactions are triggered only by the movement of cash
ACCRUAL BASIS:
If income is measured when cash is received and expenses are measured when cash is spend , the business is said to be operating on a cash basis, this is like our check book If income is measured when the transactions occurs irrespective of physical flow of cash, the business is said to be operating on a accrual basis In accrual basis accounting, expenses occur when the company incurs the obligation to pay, not when it actually parts with the cash In accrual basis accounting, sales and cost are recorded when the goods are shipped and customers incur the obligation to pat, not when they actually pay. Ex:
Under accrual basis accounting you would lower your net worth when you user your charge card rather than when you ultimately paid the bill Under accrual basis accounting, the income statement does not reflect the movement of cash, but rather, the generation of obligation to pay cash in the future
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
HOMEWORK # 4
Develop conceptual and logical data model for Cash Flow Balance Sheet Income Statement
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
Beginning Cash Balances
Cash Receipts
Cash Disbursement
Cash From Operations
Fixed Assets Purchase
Net Borrowings
Income Tax Paid
Sale of Stock
Ending Balance
$155,000
2,584,900
2,796,438
211, 538
1,750,000
900, 000
0
1,550,000
$643,462
Cash Flow Statement
Cash
Account Receivable (AR)
Inventory
Prepaid Expenses
Current Assets
Other Assets
Fixed Assets at Cost
Accumulated Depreciations
Net Fixed Assets
$643,462
454, 760
414, 770
0
1,512,992
0
1, 750, 000
78, 573
1,671,427
Balance Sheet
Total Assets $3,184,419
Ending Cash on the Cash Flow statement always equals CASH on the balance sheet
Accounts Payable $236,297
Accrued Expenses 26,435
Current Portion of Debt 100,000
Income Taxes Payable 139, 804
Current Liabilities 502, 536
Long Term Debt 800, 000
Total Liabilities & Equity $3,184,419
Capital Stock 1,550,000
Retained Earnings 331,883
Shareholder's Equity 1,881,883
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
INTEGRATION OF CASH FLOW AND BALANCE SHEET
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
HOMEWORK # 5
Develop an income statement report similar to the cash flow report in slide # 21
Integrate the Income Statement and Balance Sheet for the following accounts, develop a slide deck same as slide # 21
Net Income (IS Account) Retained Earning ( BS Account) Shareholders Equity ( BS Account)
Net Sales (IS Account) Account Receivable ( BS Account)
CloneSkills, Inc.
SAP HANA & BOBI 4.0 Competency Development Program Financial Analytics
Case Study
CloneSkills, Inc. http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, [email protected]
SAP HANA Enabled SAP BOBI 4.0 Solutions
APPENDIX - SAMPLE LOGICAL DATA MODEL
Sales Revenue
GL Account
Entity
Time
Currency
Customer
Product