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
CloneSkills, Inc.
http://www.CloneSkills.com , 916. 631.1980, 800.836.5696, Info@CloneSkills.com
SAP HANA Enabled SAP
BOBI 4.0 Solutions
Analyzing Financial Statements (FS) Through SAP BOBI 4.0
a “SAP HANA” enabled solutions

CloneSkills, Inc.
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.
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.
Financial Analytics
Case Study
CloneSkills, Inc.
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.
Financial Analytics
Case Study
CloneSkills, Inc.
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.
Financial Analytics
Case Study
CloneSkills, Inc.
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.
Financial Analytics
Case Study
CloneSkills, Inc.
BOBI 4.0 Solutions

Balance Sheet (BS) Analysis
CloneSkills, Inc.
Financial Analytics
Case Study
CloneSkills, Inc.
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.
Financial Analytics
Case Study
CloneSkills, Inc.
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
Most Liquid
Least Liquid
CloneSkills, Inc.
Financial Analytics
Case Study
CloneSkills, Inc.
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
CloneSkills, Inc.
Financial Analytics
Case Study
CloneSkills, Inc.
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.
Financial Analytics
Case Study
CloneSkills, Inc.
BOBI 4.0 Solutions

Income Statement (IS) Analysis
CloneSkills, Inc.
Financial Analytics
Case Study
CloneSkills, Inc.
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.
Financial Analytics
Case Study
CloneSkills, Inc.
BOBI 4.0 Solutions

HOMEWORK # 2
 Explain the following Income Statement building blocks with examples ( no story please)
 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.
Financial Analytics
Case Study
CloneSkills, Inc.
BOBI 4.0 Solutions

Cash Flow (CF) Analysis
CloneSkills, Inc.
Financial Analytics
Case Study
CloneSkills, Inc.
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.
Financial Analytics
Case Study
CloneSkills, Inc.
BOBI 4.0 Solutions

HOMEWORK # 3
 Explain the following Cash Flow building blocks with examples ( no story please)
 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.
Financial Analytics
Case Study
CloneSkills, Inc.
BOBI 4.0 Solutions

Accrual Basis vs. Cash Basis Analysis
CloneSkills, Inc.
Financial Analytics
Case Study
CloneSkills, Inc.
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.
Financial Analytics
Case Study
CloneSkills, Inc.
BOBI 4.0 Solutions

HOMEWORK # 4
 Develop conceptual and logical data model for
 Cash Flow
 Balance Sheet
 Income Statement
CloneSkills, Inc.
Financial Analytics
Case Study
CloneSkills, Inc.
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.
Financial Analytics
Case Study
CloneSkills, Inc.
BOBI 4.0 Solutions
INTEGRATION OF
CASH FLOW AND BALANCE SHEET

CloneSkills, Inc.
Financial Analytics
Case Study
CloneSkills, Inc.
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.
Financial Analytics
Case Study
CloneSkills, Inc.
BOBI 4.0 Solutions
APPENDIX - SAMPLE LOGICAL DATA MODEL
Sales Revenue
GL
Account
Entity
Time
Currency
Customer
Product

Analyzing Financial Statements (FS) Through SAP BOBI 4.0 - a “SAP HANA” enabled solutions

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Analyzing Financial Statements (FS) Through SAP BOBI 4.0 - a “SAP HANA” enabled solutions