Sample Restructuring Charges And Income

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Information about Sample Restructuring Charges And Income
Finance

Published on February 10, 2009

Author: tgdelaney

Source: slideshare.net

Description

A sample of Financial Training Partners' web-based tutorial on how to make adjustments to a company's income when it includes a restructuring charge.

Restructuring Charges and Income Tuesday, February 10, 2009

What’s the trend? © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

What’s the trend? Anyco, Inc. Operating Income $16,419 $14,425 $6,352 2005 2006 2007 © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

What’s the trend? Anyco, Inc. Operating Income $16,419 $14,425 $6,352 2005 2006 2007 © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

What’s the trend? Anyco, Inc. Operating Income $16,419 $14,425 $11,588 $6,352 2005 2006 2007 © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

What is a restructuring charge? © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

What is a restructuring charge? • An expense for planned cost cuts © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

What is a restructuring charge? • An expense for planned cost cuts • Includes costs for asset write-downs, employee layoffs, facility closings, and other expenses © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

What is a restructuring charge? • An expense for planned cost cuts • Includes costs for asset write-downs, employee layoffs, facility closings, and other expenses • An accrual made in advance of the actual cash outlays © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

Restructuring charges in the financial statements Tuesday, February 10, 2009

Restructuring charges in the financial statements Income Statement An operating expense when the charge is taken No expense when future cash outlays are made Tuesday, February 10, 2009

Restructuring charges in the financial statements Income Balance Statement Sheet An operating Creates a expense when restructuring the charge is liability when the taken charge is taken Liability is No expense reduced by when future cash amount of cash outlays are made outlays when made Tuesday, February 10, 2009

Restructuring charges in the financial statements Income Balance Cash Flow Statement Sheet Statement An operating Creates a Non-cash portion expense when restructuring increases the charge is liability when the operating taken charge is taken activities when the charge is Liability is No expense taken reduced by when future cash amount of cash Cash outlays outlays are made outlays when decrease made operating activities when made Tuesday, February 10, 2009

Anyco’s restructuring charge © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

Anyco’s restructuring charge Anyco, Inc. Income Statement 2007 Revenues $210,440 Cost of goods sold 117,620 Selling, general, and admin expense 74,880 Restructuring charge 11,588 6,352 Operating income © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

Anyco’s restructuring charge Anyco, Inc. Income Statement 2007 Revenues $210,440 Cost of goods sold 117,620 Selling, general, and admin expense 74,880 Restructuring charge 11,588 Restructuring charge 6,352 Operating income © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

Anyco’s restructuring charge Anyco, Inc. Income Statement operating Not a regular 2007 expense Revenues $210,440 Company decides timing and amount Cost of goods sold 117,620 Selling, general, and admin expense 74,880 Restructuring charge 11,588 Restructuring charge 6,352 Operating income © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

Adjusting operating income © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

Adjusting operating income Anyco, Inc. Income Statement 2007 Revenues $210,440 Cost of goods sold 117,620 Selling, general, and admin expense 74,880 Restructuring charge 11,588 Operating income 6,352 © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

Adjusting operating income Anyco, Inc. Income Statement 2007 Revenues $210,440 Cost of goods sold 117,620 Selling, general, and admin expense 74,880 Restructuring charge 11,588 Operating income 6,352 +11,588 Restructuring charge © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

Adjusting operating income Anyco, Inc. Income Statement 2007 Revenues $210,440 Cost of goods sold 117,620 Selling, general, and admin expense 74,880 Restructuring charge 11,588 Operating income 6,352 +11,588 Restructuring charge Adjusted operating income 17,940 © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

What’s the trend? Anyco, Inc. Operating Income $16,419 $14,425 $6,352 2005 2006 2007 © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

What’s the trend? Anyco, Inc. Operating Income $17,940 $16,419 $14,425 $6,352 2005 2006 2007 © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

What’s the trend? Anyco, Inc. Operating Income $17,940 $16,419 $14,425 $6,352 2005 2006 2007 © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

Our web-based tutorials © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

Our web-based tutorials • Self-guided presentations on risk analysis and loan structuring © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

Our web-based tutorials • Self-guided presentations on risk analysis and loan structuring • Brief - about 15 minutes long © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

Our web-based tutorials • Self-guided presentations on risk analysis and loan structuring • Brief - about 15 minutes long • With job aids you can download for future reference © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

Our web-based tutorials • Self-guided presentations on risk analysis and loan structuring • Brief - about 15 minutes long • With job aids you can download for future reference • For more information, contact us at info@fintrain.com © 2008, Financial Training Partners, LLC Tuesday, February 10, 2009

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