How To Find Mistakes In The Income Statement

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  • Опубліковано 23 гру 2024

КОМЕНТАРІ • 162

  • @Psycho_Analyst
    @Psycho_Analyst 3 роки тому +56

    I learned more than my cma class 🤣

  • @joydaniels6474
    @joydaniels6474 Рік тому +3

    You're the best on the internet space. When I first found you, I tried watching other channels for comparison. I told myself that if you're this good, then there must be other better people. My finding is that, nobody comes close even by a million miles. You're simply the best, brilliant, concise, and not boring to watch or listen to. This is more than an appreciation of your work, it's a FACT that must be taken to the bank.

  • @tarunnegi1550
    @tarunnegi1550 2 роки тому +20

    I am an accounting professional, trust me the way you explained things in your video its just awesome.. it started seem like a cake walk lol.

  • @FundamentalEconomics
    @FundamentalEconomics 3 роки тому +21

    Dear Sir, You are still simply the best teacher on finance over the internet. I wish i were a student of yours.

  • @BGB17
    @BGB17 3 роки тому +9

    I was concerned I may be getting into the wrong feild but I had so much fun watching this video and seeing the company's DNA sequencing. I think I made the right choice

  • @genxiao8737
    @genxiao8737 3 роки тому +12

    Wow! This is amazing! I never saw videos that explain real cases like this! This is closer to the real cases in jobs!

    • @TheFinancialController
      @TheFinancialController  3 роки тому +1

      Thanks for watching my accounting content Gen

    • @yinyin7614
      @yinyin7614 3 роки тому +1

      I can't agree more👍. Hope you can keep sharing your experience & knowledge with us. Very useful in my job.

  • @romeshkirpalani848
    @romeshkirpalani848 2 роки тому +3

    Oh lovely, a financial controller....direct experience sharing....I subscribed right away....so excited....🙂

  • @elizabethrosa2356
    @elizabethrosa2356 2 роки тому +4

    Bill, I literally did a happy dance while watching this T12 video! Your teaching is incredibly helpful & reignites my love for accounting. Thank you!

  • @valleycarpentry5269
    @valleycarpentry5269 Рік тому +1

    Also kitchen rent sum might suggest is just rent..... Ie under operational expenses

  • @gnw8066
    @gnw8066 10 місяців тому +1

    Sorry love your video. But one quick question: why payroll of chef and packaging are a part of COGS?

  • @yang-pe1kj
    @yang-pe1kj 3 роки тому +2

    Just start to watch your video this week, , maybe no order to follow. It is great and clear. As this video, I have a question about COG, can you please explain why preparing and packaging for customers should be CoG s expenses but delivery out to customers as operating expenses . Appreciate

    • @TheFinancialController
      @TheFinancialController  3 роки тому +2

      prep and packaging related directly to the creation of the inventory, so it's cogs. Ship out to customer is not part of creation of inventory, thus not cogs.

  • @RajKumar-oe8di
    @RajKumar-oe8di 2 роки тому

    This is a really very good analysis of an Income statement of a company, and this is how we can identify potential fallouts.

  • @tanmaytikle8521
    @tanmaytikle8521 3 роки тому

    Your explanation is so crisp and to the point

  • @obwakahenry4498
    @obwakahenry4498 3 роки тому +2

    Have learned a lot from your videos ... please can you do something on Revenue Review

  • @oyebolaakinyemiaca9592
    @oyebolaakinyemiaca9592 3 роки тому +2

    Thanks for a well elucidated lecture. Pls can you share the excel file on this and income statement for beginners

  • @ReneeReneeReneeRose
    @ReneeReneeReneeRose 2 роки тому

    Great video! I'm interviewing for a Jr financial analyst role for a not for profit healthcare company. Part of my interview is do be able to read the P&L, any tips or advice on P&L mistakes I should recognize? I've been looking at examples but nothing jumps out at me other than revenue is greater than expenses

  • @JL-zn4mr
    @JL-zn4mr 3 роки тому +2

    Depending on the type of financing, if it was a term loan, wouldn't you expect to see interest expense decrease on a month to month rather than increase as you should be paying more in principal with each subsequent payment?

    • @TheFinancialController
      @TheFinancialController  3 роки тому +6

      Like you said it depends on the type of loan. For example line of credit, interest can increase based on how much we use of the line. The idea in the video is to check for material errors that stand out

  • @kramishcool7926
    @kramishcool7926 3 роки тому +2

    A very useful video.
    Appreciated if you put more videos like based on possible misstatement identification

  • @ammie8937
    @ammie8937 3 роки тому +8

    Hope there’s a video shows how to find an error on balance sheet, really appreciate 🙂

    • @TheFinancialController
      @TheFinancialController  3 роки тому +4

      Great idea, ok

    • @arial5906
      @arial5906 3 роки тому

      Yes, I think find an error on balance sheet is more difficult.

    • @ncfundi
      @ncfundi 3 роки тому

      Hi Bill, I’m in the process of creating P&l based on a caned report from quickbooks where I’m trying to break out EBITDA. The interest, taxes,amortization and depreciation are all rolled into the expense category of the report. Should I totally exclude these accounts from the reporting and then add them back in ? And if so would I include them in the other income/expense area of the p&l? Thanks?

    • @amandaholbrook24
      @amandaholbrook24 2 роки тому

      @@TheFinancialController A video on finding balance sheet errors would be wildly helpful, I have been asked that and not really known what answer they are looking for at all.

  • @stevenkelly8567
    @stevenkelly8567 2 роки тому

    Awesome video! Thank you. The one thing that caught my attention here was your comments about delivery in. I always thought if delivery IN or freight in wasn't close to or equal to zero, it was an error that usually indicated an issue with landed cost allocation but maybe that's just our business model. We try to avoid running delivery in through the P&L. Should just be relieved through COGS and part of the inventory valuation.

  • @ngehulumala9482
    @ngehulumala9482 6 місяців тому

    i literally cannot wait to finish my CPA as with it plus your videos I am a confident accountant

  • @AliAli-zl4ez
    @AliAli-zl4ez 2 роки тому

    Lot of thanks , à see that the presentation is for à cash flow more than a Balance statement

  • @ahmedabdelsamea3794
    @ahmedabdelsamea3794 2 роки тому

    Hi Bill,
    I have a question regarding the commission expense that paid to the collector who gets our due money from customers that expense should be classified as G&A or S&M? And why?

  • @alkeshshah1777
    @alkeshshah1777 2 роки тому

    Hi! Do you have mistakes to find balance sheet and cash flow for these same financials for this company example you have used here so it can all be connected and we can understand how these messy financials affect the balance sheet and cash flow etc. If not video, Is there any way to find copy these financials and see the errors explained for income statement, balance sheet, cash flow etc? Please help!

  • @amiramir-bh5dk
    @amiramir-bh5dk 3 роки тому +2

    Thanks for the great video. Can the income statement challenges and mistakes of commercial (trading) and service companies be very different? if yes, could you please make a video to analyze the mistakes of these sort of companies?

    • @TheFinancialController
      @TheFinancialController  3 роки тому +1

      Interesting point. I will think about that for a future vidoe

    • @amiramir-bh5dk
      @amiramir-bh5dk 3 роки тому

      @@TheFinancialController Thank you for your time and consideration.🎎

  • @BaoTran-hu5hx
    @BaoTran-hu5hx 3 роки тому +4

    Hey Bill, thanks for the video. It is very useful. I would like to understand more throughly about the EBITDA as well as the cash flow techniques based on EBITDA. Would appreciate if you can make a video about it.
    Also, I am now loving in the EU. I’ve been evaluating several professional qualifications for accounting to pursue such as ACCA, CIMA, etc. For CPA, it is more of the US and not really relevant to the EU. Maybe you can talk about the differences/pros/cons of these qualifications? Thanks!

  • @SHINeeKeyofLucifer
    @SHINeeKeyofLucifer 3 роки тому +4

    Thanks! This is really valuable stuff. Would love to see more like this

  • @NicoleMcCracken-e6d
    @NicoleMcCracken-e6d 2 місяці тому

    What if interest expense is related to aging A/R? I worked for a bakery and we had standing accounts with local businesses for daily delivery. We sent monthly invoices and if a business fell behind more than 30 days, we charged late fees that were a percentage of the past due amount. Is that technically still not operating revenue?

  • @yinyin7614
    @yinyin7614 3 роки тому

    Great detail. Highly recommended.

  • @AlmightyBruce-c3j
    @AlmightyBruce-c3j 4 дні тому +1

    where can i find this excel sheet he was using in his video??

  • @felixoluwaseyifunmi3955
    @felixoluwaseyifunmi3955 Рік тому

    Hello sir
    Thanks for your effort
    Can you shed more light on cost of sales?
    Seems it’s an area where most of us get it wrong

  • @dennisalexander1806
    @dennisalexander1806 2 роки тому

    Do you use Numbers or Excel on your Apple laptop?

  • @anshulbahal2791
    @anshulbahal2791 Рік тому

    So much value in your content, thank you

    • @anshulbahal2791
      @anshulbahal2791 Рік тому

      Sir I want to be your student, please guide me. Is it possible to know - about yours live and other courses which can be extremely useful in building a career in accounting ?

  • @CorporateFun_DUBAI
    @CorporateFun_DUBAI 2 роки тому

    I have no words thanks alot

  • @aaroacademy
    @aaroacademy 2 роки тому

    Well explained thank you.

  • @ahmedismail717
    @ahmedismail717 3 роки тому +2

    Always shining Boss ✨✨

  • @khmerempiretourarts2571
    @khmerempiretourarts2571 Рік тому

    Very good explanation, Thank you

  • @theteammelk
    @theteammelk Рік тому

    HELP! My boss (non-accountant) thinks correcting reserves for doubtful accounts has nothing to do with the current year P&L if the reserve corrections are for revenue from years past!!

  • @valleycarpentry5269
    @valleycarpentry5269 Рік тому

    I seem to hear different opinions regarding whether labour/salaries are part of cogs or operational expenses....?..???

    • @gnw8066
      @gnw8066 10 місяців тому

      Same!!

  • @dforyou-informativetipstra9012
    @dforyou-informativetipstra9012 3 роки тому

    My accounting guru 🔥👏

  • @jamesstuart1792
    @jamesstuart1792 Рік тому

    Hey how can I get this income tax statement you are using now ?

  • @nicolesitu5078
    @nicolesitu5078 2 роки тому

    Your videos are so practical!👍

  • @ramkrishan3267
    @ramkrishan3267 3 роки тому

    Sir you are serving great knowledge...

  • @henryp218
    @henryp218 2 роки тому

    awesome video as always!

  • @eshaniist
    @eshaniist День тому

    Could you please tell me how can I enroll AP course?

  • @olufemiadebayo7777
    @olufemiadebayo7777 3 роки тому

    Great video. Thanks for this. Could the big numbers also be a reversal or an accrual?

  • @yadiravillanueva1416
    @yadiravillanueva1416 3 роки тому

    Thanks for sharing your knowledge.I am learning a lot. God bless you

  • @shihabkpuae
    @shihabkpuae 3 роки тому

    Wonderful presentation..!💐

  • @ramreddyi9710
    @ramreddyi9710 3 роки тому

    Super sir ,I got the knowledge about income statment

  • @mohamedrezk6457
    @mohamedrezk6457 3 роки тому

    Thanks and appreciating your great efforts

  • @mosaradwan
    @mosaradwan 2 роки тому

    Thank you for sharing

  • @olufemiadebayo7777
    @olufemiadebayo7777 3 роки тому +1

    Yes please, lets get a video on balance sheet please

  • @Aliakbar-te4du
    @Aliakbar-te4du 3 роки тому

    thanks for sharing..good stuff

  • @hackit9578
    @hackit9578 Рік тому

    Hi Bill, thanks for a great video. I always learn something new. Thanks Kesh ☺️ 🇬🇧

  • @JudgeJonesSells
    @JudgeJonesSells 2 роки тому

    With regards to the $25,000 in one month for payroll for the Operations department, how might they accrue that over time if they maybe did not know they were planning to do any sort of bonus? I guess I would just want to know how bonuses would normally be handled?

    • @TheFinancialController
      @TheFinancialController  2 роки тому +1

      You ask the HR team for bonus agreements periodically so you can create a monthly accrual

    • @MB-ub4sd
      @MB-ub4sd 2 роки тому

      @@TheFinancialController Yeah but at our company we had the quarterly target, and don't really know until the final month if we're going to hit it or not.

  • @giorgilobjanidze8297
    @giorgilobjanidze8297 3 роки тому

    Brilliant video. Like other ones. Many thanks

  • @ghananshu_k3723
    @ghananshu_k3723 3 роки тому

    While taking Gross margin, we could consider gross revenue instead of Total revenue because Total revenue consisted of Interest revenue as well

  • @shawnkhanian5584
    @shawnkhanian5584 2 роки тому

    for that mistake with the packaging cogs, that would have to be covered in the md&a hopefully

  • @IsabellaMolokwu
    @IsabellaMolokwu Місяць тому

    How to prepare financial accounts

  • @jonathanma888
    @jonathanma888 3 роки тому

    Awesome video bro, I am about to become a financial controller in an ibank, would be great to have some advice from you

  • @manwithoutname0
    @manwithoutname0 3 роки тому

    Zero dislikes.... u deserve dat

  • @haloepic3092
    @haloepic3092 3 роки тому

    Nice video . I have a question does being a controller give a better chance of becoming a CFO of a company or should I stay in the big 4 ? I wanna make like 500k a year but don’t know if controller allows to do that or I work towards a partner ? Thnx

    • @TheFinancialController
      @TheFinancialController  3 роки тому +1

      Both paths (partner or CFO) are good given you commit. And yes controller can nicely get you to CFO, but also some controller make 500k or more. All good choices but you gotta pay your dues sir

    • @haloepic3092
      @haloepic3092 3 роки тому

      @@TheFinancialController thank you for the reply I have another question . If I work as a internal auditors how long will take me to get to controller ? 2 years or less ?

  • @PRO2358
    @PRO2358 3 роки тому

    Very good video 👍👍

  • @GMHonAir
    @GMHonAir Рік тому

    Loved this video

  • @ahmadnazir5222
    @ahmadnazir5222 Рік тому

    Thank you Bro

  • @Sanjab36
    @Sanjab36 2 роки тому

    U rock i enjoy every video..it's a music to all finance analyse lovers ears !👌👏👏👏

  • @josephkaaya4517
    @josephkaaya4517 3 роки тому

    Great work.

  • @Heranmedia1
    @Heranmedia1 4 місяці тому

    please i am a poor please seend me the financial audit book and what i must to be see in financial audit and how i audit it

  • @YoucefYoucef-ft9ce
    @YoucefYoucef-ft9ce 3 роки тому

    Thank you sir all respect

  • @kanagasrinivasan3793
    @kanagasrinivasan3793 3 роки тому

    Dear Bill.. Yet another Great Video :) much appreciated.. Would you mind asking me a doubt like what is EGM and What is AOP? very briefly or just the Expansion of EGM and AOP will do for me. Thanks in advance :)

    • @TheFinancialController
      @TheFinancialController  3 роки тому

      Hi kanaga. I am not sure where do you see EGM and AOP in the video. What do they stand for?

    • @kanagasrinivasan3793
      @kanagasrinivasan3793 3 роки тому

      Hi Bill thanks for replying. I found that AOP stands for Annual Operating Profit. I see them in an income statement only. Revenue minus Cost is Equal to EGM. But I m not sure what is EGM stands for? Please share me do you have any idea.

  • @stephenadeya8662
    @stephenadeya8662 3 роки тому

    Thanks for the weekly informative and topical session.

  • @arslan_TM
    @arslan_TM 3 роки тому

    Kindly introduce some video tutorials about How to perform GL reconciliations in real world with excel sheets.

  • @PRO2358
    @PRO2358 3 роки тому

    Sir, do videos on forensic audits too

  • @priyankac179
    @priyankac179 3 роки тому

    Thank you for the wonderful content!

  • @rahuljain4346
    @rahuljain4346 3 роки тому

    Whats delivery in and out?

    • @TheFinancialController
      @TheFinancialController  3 роки тому +1

      Delivery in is the delivery cost to bring in the inventory and the materials to build inventory. This cost should be part of the cost of the inventory itself. Delivery out is the cost of delivery to deliver the inventory to the customers. This cost is typically operating cost and not the cost of the inventory.

    • @LoveThatRod
      @LoveThatRod 3 роки тому

      SHIPPING COSTS - and unlike video presenter - Yes - Shipping is a variable cost and part of CGS. As units delivered rises and Revs arise, you want to match that rising shipping cost to that Rev. Shipping is not a fixed cost.

  • @z2alcan
    @z2alcan 2 роки тому

    It was reall nice one

  • @silvianfonutchi1818
    @silvianfonutchi1818 3 роки тому

    Great content

  • @time968
    @time968 3 роки тому

    Good Informative Video. I watch all your videos.. especially the Scam/Fraud related . I just cleared CFE, my request you to is do a video on uncovering fraud in Financial Statements/Books ( Misappropriation of Assets etc)/. Thanks.

  • @404TRUCKERTV
    @404TRUCKERTV 3 роки тому +2

    Lol, Real world statements look way different then text book lol. In school we are taught to only put dollar signs on the top number and the final ended number double underline. And capitalize only the first word of each category.

  • @stephyjoseph95
    @stephyjoseph95 3 роки тому

    Hi Sir, I'm ur new subscriber. Can interest income keep under op.revenue If it is a trading company ?

  • @josephtoma6468
    @josephtoma6468 3 роки тому

    very informative

  • @folasadeoyewole1564
    @folasadeoyewole1564 3 роки тому

    Thank you

  • @Jackod01
    @Jackod01 3 роки тому +2

    Hi Bill, great video! Hypothetically if the leases are not short term, wouldn't the rental operating expenses be capitalised as a right of use assets and depreciated over the term of the lease (leaving nil rental expense, and instead a ROU asset depreciation and ROU interest expense)? Or would this only apply to the final FS? I guess for management purposes it is probably more beneficial to present the costs as COGS to get a better idea of operational performance. Would be great to get your insight on the new leases treatment from a financial controller viewpoint!! :)

    • @TheFinancialController
      @TheFinancialController  3 роки тому +3

      Thanks jack. Even if capitalized. The lease expense should be presented as CoGs since it’s directly related to food production

  • @malamofficial7558
    @malamofficial7558 Рік тому

    Thank ❤

  • @jeandesirfils
    @jeandesirfils Рік тому

    Do you have to get permission to utilize the logos in the videos? Or is it fair-use?

  • @CastroEulis145
    @CastroEulis145 Рік тому

    Is this a real income statement? How many accountants contributed to this income statement?

  • @jayliu645
    @jayliu645 8 місяців тому +1

    The background music is very distracting.

  • @alia.al-mutawa2456
    @alia.al-mutawa2456 2 роки тому

    I like your explanation and it really very useful .
    But I prefer you slow down the way you speak .Specially that a lot of your followers are not from native of English language. Appreciating your contribution and knowledge.

    • @MB-ub4sd
      @MB-ub4sd 2 роки тому

      In the settings icon in bottom right hand corner you can change the speed to 75% perhaps

  • @kimbolcalingayan6800
    @kimbolcalingayan6800 3 роки тому

    Is that how you audit

  • @jasminau9476
    @jasminau9476 Рік тому

    This is a vertical analysis

  • @maryamaishanyc7449
    @maryamaishanyc7449 7 місяців тому

    Thanks ☺️

  • @aishwaryajain5322
    @aishwaryajain5322 9 місяців тому

    Refreshed memory

  • @muhammadmehtabmanzar1736
    @muhammadmehtabmanzar1736 3 роки тому

    Dear You should talk about initial analytical instead of jumping into misstatements/errors.
    That's the only reason why Chartered Accountants from Pakistan are on top.

  • @kimbolcalingayan6800
    @kimbolcalingayan6800 3 роки тому

    I learned more than in school hahahah.

  • @alia.al-mutawa2456
    @alia.al-mutawa2456 2 роки тому

    I like your video and explanation .
    But I prefer to slow down the way you speak .
    Specially for those people who are not native for English language.

  • @ymonpaulo
    @ymonpaulo 2 роки тому

    I find your videos interesting, but it kinda distracting if your cursor is moving from all directions.

  • @sreekumar990
    @sreekumar990 3 роки тому

    ♥️♥️

  • @ymonpaulo
    @ymonpaulo 2 роки тому

    hey guys in today's video i'm going to
    show you how to find mistakes or errors
    in a company's income statement
    so be jumping into my computer here i'm
    going to show you going through revenue
    and expenses line by line what are the
    areas that have the most frequently have
    accounting errors or misstatements
    and for example here looking at revenue
    you have interest income
    and why would a company show interest
    income and its operating revenue
    it makes no sense so we're going to go
    through this line by line and i'm going
    to show you all the accounting errors in
    this income statement
    this is the topic of this video today so
    stick around
    if you're new here welcome welcome my
    name is bill hannah i'm the financial
    controller
    i'm a licensed cpa in the great state of
    new york and i have over 15 years of
    experience in the field of finance
    what i started out at
    pricewaterhousecoopers as an auditor
    and then i transitioned out to private
    industry and then i worked my way up
    from a financial analyst position all
    the way up to a corporate controller
    position
    which is what i do today and this
    channel is all about giving you the
    summary or the juice of my experience
    over the last decade and a half
    and i do this here in the youtube
    channel as well as on my website
    through blog posts an online course and
    templates so go ahead and check that out
    as well
    all right jumping into the income
    statement here to try and figure out
    what's going on so this income statement
    obviously
    as you would imagine is broken down into
    revenue and then expenses
    and when you look at expenses it's
    further broken down by coastal goods
    sold
    operating expenditure and then here you
    have non-operating expenses which is
    going to be depreciation
    interest expense and income taxes all
    right so the first thing we're going to
    do is try and figure out what kind of
    company is this by looking at the income
    statement
    so looking here at the income statement
    you can see that they have cost of goods
    sold
    and that will tell you that this is a
    manufacturing company right
    and then within the manufacturing space
    you can also look further into expenses
    and figure out
    what kind of manufacturing is this so
    you can see here that they have food
    inventory cogs or
    food inventory cost of goods sold so
    this tells you this is a food
    manufacturing operation
    all right so keeping that in mind
    keeping in mind that this is a food
    manufacturing company
    let's go through the revenues and
    expenses and figure out what's wrong
    with this income statement so
    the first line here in revenue is gross
    unit revenue and in january is 61 000
    and then it's 37 and then it's eight and
    then it's 11.
    so kind of fluctuates a lot throughout
    the year and normally this would be a
    sign that this some sort of an
    accounting
    error here or misstatement but this is a
    manufacturing company a food
    manufacturing company
    so it relies on receiving precious
    orders from its distributors
    to make sales right so this makes sense
    that it can fluctuate throughout the
    year
    if this was a subscription company or a
    software company this would be a
    different matter
    because then you should expect revenue
    to be sort of steady
    and not fluctuate up and down so much so
    in here we think this is fine
    for interest income now this is a
    manufacturing company
    why would it have interest income and
    its revenue and it makes no sense so
    this is the first accounting mistake
    here that this company
    is recording an interest income in its
    operating revenue
    right when is the only case where
    interest could be an operating revenue
    is if the company is a bank if this is
    we're looking at a financial institution