5. La hora de la verdad I

General Shareholders Meeting Overview

Introduction to Financial Results

• The speaker introduces the annual general shareholders meeting, emphasizing the importance of presenting the profit and loss account for the year.

• The profit and loss account begins with sales revenue, highlighting that it reflects the difference between income and expenses.

Understanding Profit and Loss Account

• The speaker notes that total sales revenue is 200, questioning whether this figure is good or bad in terms of net profit.

• Following sales, a series of expenses will be deducted from this amount, leading to an uncertain outcome regarding profitability.

Classification of Expenses

• Acknowledging numerous expenses, the speaker likens a company to a "black hole" for costs, stressing the need for classification and organization.

• Expenses can be categorized as "costs," which are defined as allocated expenditures based on various classifications.

Types of Costs Explained

Fixed vs. Variable Costs

• The discussion focuses on classifying costs into fixed and variable categories for simplicity.

• Fixed costs remain constant regardless of sales volume (e.g., rent), while variable costs fluctuate with sales levels.

Practical Examples

• An example illustrates how purchasing inventory impacts cost classification; buying materials may not always equate to variable costs depending on usage.

Real-Life Analogy: Milk Purchase

Personal Experience with Costs

• The speaker shares a personal anecdote about renting an apartment and needing to buy milk despite being tired from travel.

• This leads to a humorous situation where he buys 100 liters of milk but only consumes four over the weekend.

Cost Calculation Methodology

• He explains how actual consumption versus purchase affects cost accounting in businesses, drawing parallels with his milk example.

Calculating Gross Margin

Determining Consumption

• To find variable costs in business, one calculates material consumption using initial stock plus purchases minus final stock.

Finalizing Financial Figures

• In this case study involving milk, after accounting for initial stocks and purchases, only four liters were consumed during that period.

Understanding Earnings Before Interest and Taxes (EBIT)

Summary of Financial Performance

• After calculating gross margin by deducting fixed costs (-70 million), amortizations (-10 million), we arrive at EBIT (+40 million).

Significance of EBIT