Balance Sheet Decoded

Explaining all aspects of financial statements in a unique/simplified manner, with the help of 65+ Case Analysis, that will accelerate your ability to understand, analyse and decode the financial statements.

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Description

This book aims to explain the readers how to read, understand, analyse and interlink the voluminous information available in the financial statement with the help of charts, case analysis, etc. In other words, this book provides in-depth analysis, stepwise approach with the use of case analysis, to understand & decode the financial statements. This book extensively deals with the following issues & suggests on how they can be mitigated through proper analysis of financial statements:

• Laxity in credit risk appraisal and loan monitoring in banks
• Lack of appraisal skills for projects that need specialised skills, resulting in acceptance of inflated cost or aggressive projections etc.
• How to find out frauds, wilful default, diversion of funds 
• How to find out early warning signs based on proper analysis of financial statements

The entire concept of decoding of financial statement has been divided into six keys:

• Key #1 deals with Statement of Profit & Loss
• Key #2 deals with Balance Sheet
• Key #3 deals with Concept of Audit and Auditor’s Report
• Key #4 relates to Companies Auditor’s Report Order
• Key #5 is used for decoding Connecting Statements, and 
• Key #6 is the Master Key

The Present Publication is the 3rd Edition, authored by G.C. Pipara, with the following noteworthy features:

• [Reading between the lines of Financial Statements] and correlating relevant information with proper analysis, using the Authors experience
• [How to Hone your Skills] to dissect financial statements with surgical precision
• [Unlocking the Mysteries & Tricks] by explaining how to analyse the various details & detect what has been disclosed and not
• [Focused Analysis] to find out strengths, early warning signs, frauds, creative accounting, genuineness of various items, etc.
• How to read the balance sheet beyond what is visible on the surface
• How to analyse the information
• How to correlate the various details available
• [Professional Oriented Book] This book has been developed, keeping in mind the following factors:
• Interaction of the author during his trainings to various banks and organisations on credit and analysis of financial statements
• Shaped by the authors experience of 38+ years being a chartered accountant, research analyst and fraud investigator
• Reaction and responses of attendees during the trainings, have also been incorporated at different places in the book
• [New Chapter on CARO 2020] has been considered in detail under Key #4 | The Companies Auditor’s Report Order.
• [Updated & Amended] All changes made in the Companies Act and latest position as at the end of March 2021 has been considered in this book

The detailed contents of the book are as follows:

• Statement of Profit & Loss
• Revenue from Operations
• Other Income
• Cost of Materials Consumed and Purchases of Traded Goods
• Manufacturing and Operating Cost
• Finance Cost
• Depreciation
• Tax Expense
• Other Expenses
• Exceptional Items, Extraordinary Items and Prior Period Items
• Property, Plant and Equipment – Tangible
• Fixed Assets – Intangible
• Investments
• Loans & Advances
• Other Assets
• Inventories and Trade Receivables
• Cash, Cash Equivalent and Bank Balances
• Advances Recoverable in Cash or Kind or for Value to be Received
• Shareholders’ Funds or Net Worth or Capital
• Provisions & Contingent Liabilities
• Borrowings
• Trade Payables and Other Liabilities
• Concept of Audit and Auditor’s Report
• Understand the Audit
• Report on Internal Financial Controls
• Analysis of Opinions
• Analysis of Emphasis of Matters/Note
• Companies Auditor’s Report Order
• Control over Resources
• Related Party Transactions
• Legal Compliance
• Statutory Dues
• Financial Health of the Company
• End Use of Funds
• Whistle Blower
• Resignation of Statutory Auditor
• Connecting Statement
• Significant Accounting Policies
• Notes on Accounts
• Cash Flow Statements
• Master Key
• How to Link 5 Key to Decode Financial Statement 

About the author

G.C. Pipara

G.C. Pipara is a practicing Chartered Accountant holding degrees in commerce and law. His 37 years of experience in accounting and auditing, especially his ability to analyse financial statements from different angles, are now legendary. His brand of analysis of financial statements is distinct.

The Government of India nominated him as an independent director on the board of State Bank of Saurashtra (now merged with State Bank of India), from 10th August 2007. Considering his contribution for improvement in the quality of assets, corporate governance, he was again nominated as an independent director on the board of State Bank of Travancore (now merged with State Bank of India), for the period May-2009 to May-2012.

While practicing as Chartered Accountants in the field of auditing, many cases have been investigated by him on behalf of Economic Offence Wing, CID Crime, Special Operation Group (SOG), City Crime Branch of Government of Gujarat relating to financial fraud and complex financial matters.

He is the founder of firm M/s. Pipara & Co. LLP having offices at Ahmedabad, Mumbai, Delhi and Surat. The said firm M/s. Pipara & Co. LLP is empanelled as forensic auditor with Indian Bank’s Association (IBA), the Securities and Exchange Board of India (SEBI), Serious Fraud Investigation Office (SFIO) etc. and he has been instrumental in delivering quality forensic audit reports, on the assignment allotted to the firm.

He is a regular speaker on various subjects of fraud, investigation, bank audits, balance sheet analysis etc. conducted by the Institute of Chartered Accountants of India, Ahmedabad Branch, and various other forums.

His training to the officers of the banks on analysis of the balance sheet is one of the most sought-after training, for enhancement of credit skills. In the last 6 years, many such training have been provided to various banks, including State Bank of India, Punjab National Bank, Bank of Baroda etc. All such training has been very well received.

He also has experience of working with two international organizations, in the field of re-writing e Learning Modules for them, which are used in India for the purpose of credit certification programme. He has also written many manuals and materials to be used for the purpose of training on credit. For research in the field of analysis of the balance sheet, “Centre for Correct and Accurate Balance Sheet Analysis (CABSA)” has been set up in the year 2016, which is registered with the Securities and Exchange Board of India under Research Analysts Regulation, as “Research Analyst”. Currently, he is a practicing Chartered Accountant, as well as a trainer and research analyst.

The overwhelming response of his maiden book on “BALANCE SHEET DECODED – Keys to Unlock Balance Sheet Secrets”, speaks about depth of the book on the various chapters relating to analysis of financial statement. The said book was published by TAXMANN in the month of July 2018 and considering the response and the feedbacks received, the revised and updated edition of the very same title is released, in less than a year, in 2019. He is also the author of book “Forensic Audit Decoded – Unlocking the Secrets of Financial Accounting and Investigation”, published by TAXMANN in September 2020.