Worked-example setupScope and assumptions
- All entities, transactions, values, rates, designations, and conclusions are fictional and supplied for instruction.
- The verifier recomputes bounded mechanics; it does not make scope, valuation, control, functional-currency, tag-selection, or release conclusions.
- Period
- Year ended December 31, Year 5
- Units
- US dollars, foreign-currency units, and XBRL contexts as labeled
- Rounding
- Retain full precision; display currency with commas and parentheses and ratios to two decimals
Adjustment bridge
Seven supplied entries reduce assets by $65,000, increase liabilities by $24,000, add $48,000 to the supplied direct-equity rail, increase revenue by $6,000, and increase net expense by $143,000. Adjusted net income is $463,000. Ending retained earnings is $1,363,000, total equity is $2,411,000, and the $4,935,000 adjusted asset total equals liabilities plus equity.
Cash flow and interpretation
Direct and indirect operating cash flow both equal $450,000. With $(300,000) investing, $(100,000) financing, and a $10,000 exchange-rate effect, the ending cash population is $960,000. The current ratio is 1.54 and return on average assets is 9.65 percent.
A conditional $(100,000) pretax change has a $(75,000) after-tax effect at the supplied 25 percent rate. That sensitivity does not establish probability or estimate quality. The release file keeps every supplied accounting conclusion and unresolved evidence request outside the arithmetic control.
Quantitative companions
Choose from 2 ways to work with this calculation.
Verified calculation · integrated close analysis
The curriculum loader recomputed this example before it entered the site build. Expand any structured input to inspect the stated facts.
- adjusted average total assets
- 4,800,000
- adjusted current assets
- 1,850,000
- adjusted current liabilities
- 1,200,000
- adjustments
- 7 fields
Inspect data
{
"benefit_accrual": {
"asset_change": 0,
"cash_change": 0,
"contributed_equity_change": 0,
"expense_change": 24000,
"liability_change": 24000,
"revenue_change": 0
},
"credit_loss": {
"asset_change": -30000,
"cash_change": 0,
"contributed_equity_change": 0,
"expense_change": 30000,
"liability_change": 0,
"revenue_change": 0
},
"currency_gain": {
"asset_change": 6000,
"cash_change": 0,
"contributed_equity_change": 0,
"expense_change": 0,
"liability_change": 0,
"revenue_change": 6000
},
"hedge_oci": {
"asset_change": 48000,
"cash_change": 0,
"contributed_equity_change": 48000,
"expense_change": 0,
"liability_change": 0,
"revenue_change": 0
},
"impairment": {
"asset_change": -50000,
"cash_change": 0,
"contributed_equity_change": 0,
"expense_change": 50000,
"liability_change": 0,
"revenue_change": 0
},
"inventory_cutoff": {
"asset_change": -60000,
"cash_change": 0,
"contributed_equity_change": 0,
"expense_change": 60000,
"liability_change": 0,
"revenue_change": 0
},
"tax_benefit": {
"asset_change": 21000,
"cash_change": 0,
"contributed_equity_change": 0,
"expense_change": -21000,
"liability_change": 0,
"revenue_change": 0
}
}- direct operating payments
- 1 field
Inspect data
{
"supplier_employee_interest_and_tax_payments": 3450000
}- direct operating receipts
- 1 field
Inspect data
{
"customer_and_other_receipts": 3900000
}- dividends
- 100,000
- ending cash population
- 960,000
- exchange rate effect
- 10,000
- financing cash flows
- 1 field
Inspect data
{
"debt_equity_and_dividend_cash": -100000
}- indirect adjustments
- 2 fields
Inspect data
{
"noncash_expense_addbacks": 200000,
"working_capital_and_other_changes": -213000
}- investing cash flows
- 1 field
Inspect data
{
"capital_expenditures_and_acquisition_cash": -300000
}- opening cash population
- 900,000
- opening retained earnings
- 1,000,000
- reported adjusted assets
- 4,935,000
- reported adjusted equity
- 2,411,000
- reported adjusted liabilities
- 2,524,000
- reported adjusted net income
- 463,000
- reported current ratio
- 1.5417
- reported direct operating cash flow
- 450,000
- reported ending retained earnings
- 1,363,000
- reported indirect operating cash flow
- 450,000
- reported return on assets
- 0.0965
- sensitivity pretax change
- -100,000
- sensitivity tax rate
- 0.25
- unadjusted assets
- 5,000,000
- unadjusted contributed equity
- 1,000,000
- unadjusted expenses
- 3,400,000
- unadjusted liabilities
- 2,500,000
- unadjusted revenue
- 4,000,000
Recomputed result
| Measure | Value |
|---|---|
| adjusted assets | 4,935,000 |
| adjusted equity | 2,411,000 |
| adjusted liabilities | 2,524,000 |
| adjusted net income | 463,000 |
| current ratio | 1.5417 |
| direct operating cash flow | 450,000 |
| ending retained earnings | 1,363,000 |
| expected ending cash population | 960,000 |
| indirect operating cash flow | 450,000 |
| return on assets | 0.0965 |
| sensitivity after tax change | -75,000 |
| statement equation difference | 0 |