Common-Size Financial Statement of Domino's Pizza Inc.

What is Common-size Financial Statement ?

A common size financial statement shows all items as percentages of a common base number. It make easier to analysis between companies or between time periods of a company. Using common-size financial statements helps investors spot trends that a raw financial statement may not uncover. The values on the common size statement are expressed as percentages of a statement component, such as revenue.

The concept has two uses, which are:

• Time series analysis. The percentages for each line item are compared over a period of time, to discern trends that management can act upon. For example, an increase in the cost of goods sold percentage might call for changes in price points or more attention to supplier costs.
• Industry comparison. The financial statements of competitors can be converted into the common size format, which makes them comparable to a company's own financial statements. One can then determine how the cost structure or asset base of a competitor varies from the company's.

This is the example of Common-Size Financial Statement of Domino's Pizza:

Common-Size Financial Statement on 2015 compared to 2014

Revenues

Revenues primarily consist of retail sales from our Company-owned stores, royalties and fees from our domestic and international franchised stores and sales of food, equipment and supplies from our supply chain centers to substantially all of our domestic franchised stores and certain international franchised stores. Company-owned store and franchised store revenues may vary from period to period due to changes in store count mix. Supply chain revenues may vary significantly as a result of fluctuations in commodity prices as well as the mix of products we sell.

Consolidated revenues increased $222.7 million or 11.2% in 2015. The increase was due primarily to  higher supply chain food volumes as well as increased sales of equipment to stores in connection with our store reimaging program. Higher Company-owned store, domestic franchise and international franchise revenues resulting from same store sales and store count growth also contributed to the rise in revenue. The inclusion of the 53rd week in 2015 also positively impacted revenues by an estimated $49.7 million. These increases were offset in part by the negative impact of changes in foreign currency exchange rates on international franchise royalties and international supply chain revenues, as well as lower cheese and other commodity prices. These changes in revenues are more fully described below.

Domestic stores

Revenues from domestic stores are primarily comprised of retail sales from domestic Company owned store operations as well as royalties from retail sales and other fees from domestic franchised stores, as summarized in the following table.

Higher franchise same store sales, store count growth and higher domestic Company-owned same store sales drove an increase in overall domestic store revenues of $91.0 million or 15.7%. These results are more fully described below.

Domestic Company-owned stores

Revenues from domestic Company-owned store operations increased $48.4 million or 13.9% in 2015. This increase was due to a 12.2% increase in same store sales as compared to 2014, as well as an estimated $9.1 million impact of the 53rd week, offset in part by the sale of 14 Company-owned stores to a franchisee that occurred in the first quarter of 2014.

Domestic franchise

Revenues from domestic franchise operations increased $42.6 million or 18.5% in 2015. The increase was driven by an 11.9% increase in same store sales as compared to 2014, as well as an estimated $6.1 million impact of the 53rd week, and an increase in the average number of domestic franchised stores open during 2015. Revenues further benefited from fees paid by franchisees to reimburse us for expenses we incurred for our internally developed online ordering platform. 

Supply chain 

Revenues from supply chain operations are primarily comprised of sales of food, equipment and supplies from our supply chain centers to substantially all of our domestic franchised stores and certain international franchised stores, as summarized in the following table. 

Domestic supply chain

Domestic supply chain revenues increased $115.4 million or 10.1% in 2015. These increases were primarily attributable to higher volumes from increased order counts at the store level and increases in sales of equipment in connection with our store reimaging program, as well as an estimated $27.8 million impact of the 53rd week. They were partially offset by lower cheese and other commodity prices. We estimate that the lower cheese block price (passed through directly in domestic supply chain pricing to franchisees) resulted in an approximate $45.3 million decrease in domestic supply chain revenues during 2015.

International supply chain 

Revenues from international supply chain operations increased $5.2 million or 4.3% in 2015. This increase resulted primarily from higher volumes in 2015 and an estimated $2.6 million impact of the 53rd week, and were offset in part by the negative impact of foreign currency exchange rates of approximately $16.4 million in 2015.

International franchise

International franchise revenues primarily consist of royalties from retail sales and other fees from our international franchise stores. Revenues from international franchise operations increased $11.0 million or 7.2% in 2015. This increase was due to an increase in the average number of international stores open during 2015, higher same store sales and an estimated $4.1 million impact of the 53rd week, and was offset in part by the negative impact of changes in foreign currency exchange rates of approximately $19.9 million in 2015. Excluding the impact of foreign currency exchange rates, same store sales increased 7.8% in 2015 compared to 2014. When the impact of foreign currency exchange rates is included, same store sales decreased 4.4% in 2015 compared to 2014. This variance was caused by a generally stronger U.S. dollar when compared to the currencies in the international markets in which we compete.

Cost of sales / Operating margin 

Consolidated cost of sales consists primarily of domestic Company-owned store and supply chain costs incurred to generate related revenues. Components of consolidated cost of sales primarily include food, labor and occupancy costs. The changes to the consolidated operating margin, which we define as revenues less cost of sales are summarized in the following table.

The $88.3 million or 14.9% increase in consolidated operating margin was due primarily to higher domestic and international franchise revenues and higher supply chain margins, as well as an estimated $16.6 million impact of the 53rd week. Franchise revenues do not have a cost of sales component, so changes in franchise revenues have a disproportionate effect on the consolidated operating margin.

As a percentage of total revenues, our consolidated operating margin increased 1.0 percentage points in 2015, due to higher supply chain and Company-owned stores operating margins as a percentage of their revenues, as well as a higher mix of franchise revenues. These changes are more fully described below.

Domestic Company-owned stores 

The changes to domestic Company-owned store operating margin, which do not include other store-level costs such as royalties and advertising, are summarized in the following table.

The $16.5 million or 20.4% increase in the domestic Company-owned store operating margin was due primarily to higher same store sales, a decrease in overall commodity prices, and an estimated $3.1 million impact of the 53rd week.

As a percentage of store revenues, the store operating margin increased 1.3 percentage points in 2015, as discussed in more detail below.

• Food costs decreased 2.2 percentage points to 26.1% in 2015, due primarily to lower overall commodity prices. The cheese block price per pound averaged $1.62 in 2015 compared to $2.13 in 2014.
• Occupancy costs, which include rent, telephone, utilities and depreciation, decreased 1.1 percentage points to 8.1% in 2015 due primarily to the positive impact of higher sales per store.
• Labor and related costs increased 1.1 percentage points to 29.1% in 2015, due primarily to higher performance based compensation and overtime as a result of increased same store sales.
• Insurance costs increased 1.3 percentage points to 4.0% in 2015, due primarily to a $4.3 million incremental insurance expense in the third quarter of 2015 related to updated actuarial estimates for our casualty insurance program.

 Supply chain. The changes to the supply chain operating margin are summarized in the following table.

The $18.3 million increase in the supply chain operating margin was due primarily to higher volumes from increased store order counts and an estimated $3.3 million impact of the 53rd week.

As a percentage of supply chain revenues, the supply chain operating margin increased 0.4 percentage points in 2015 due to lower commodity prices and lower fuel costs. However, the operating margin was negatively impacted by incremental casualty and health insurance expense, including $1.4 million recorded in the third quarter of 2015 related to updated actuarial estimates for our casualty insurance program, as well as increased labor and delivery costs. Decreases in certain food prices have a positive effect on the supply chain operating margin percentage due to the fixed dollar margin earned by supply chain on certain food items. Changes in our U.S. cheese prices decreased both revenues and costs by $45.3 million in fiscal 2015. If our U.S. cheese prices for 2015 had been in effect during 2014, the supply chain operating margin as a percentage of supply chain revenues would have increased by 0.4 percentage points. However, the dollar margin would have been unaffected.

General and administrative expenses

General and administrative expenses increased $28.3 million or 11.3% in 2015. These increases were driven by continued investments in technological initiatives and labor (primarily in ecommerce, information technology and international operations) as well as higher volume-driven expenses resulting from improved operating performance and higher same store sales, including variable performance-based compensation, Company-owned store national advertising contributions and franchisee incentives. The nonrecurring $1.7 million pre-tax gain recognized from the sale of 14 Company-owned stores during the first quarter of 2014 and an estimated $4.7 million impact of the inclusion of the 53rd week in 2015 also contributed to the increase for fiscal 2015. These increases were offset in part by the non-recurring $5.8 million impairment charge in 2014.

Interest income

Interest income increased slightly to $0.3 million in 2015.

Interest expense

Interest expense increased $12.6 million to $99.5 million in 2015. The increase was due primarily to approximately $7.3 million of expenses incurred in the fourth quarter of 2015 related to the 2015 Recapitalization, including a $6.9 million write-off of debt issuance costs and $0.4 million of interest expense that was incurred on the 2012 debt subsequent to the closing of the 2015 Recapitalization but prior to the repayment of the 2012 debt. Interest expense also increased due to a higher average debt balance, offset in part by a lower average interest rate.

Our cash borrowing rate decreased to 5.1% in fiscal 2015, from 5.3% in fiscal 2014. The decrease in the Company’s cash borrowing rate resulted from the lower interest rate on the new debt issued as part of the 2015 Recapitalization. Our average outstanding debt balance, excluding capital lease obligations, was approximately $1.68 billion in 2015 and approximately $1.52 billion in 2014. The increase in the average outstanding debt balance was due to the issuance of debt in connection with the 2015 Recapitalization.

Provision for income taxes. Provision for income taxes increased $17.4 million to $113.4 million in 2015, due primarily to higher pre-tax income. The Company’s effective income tax rate decreased slightly by 0.1 percentage points to 37.0% of pre-tax income in 2015.

Reference:

- investopedia1

- investopedia2

- accountingcoach

- Annual Report of Domino's Pizza

Ilham Anugraha Pramuditya

C1L014033 

International Accounting

Jenderal Soedirman University

Independent Audit of Annual Report PT. INDOCEMENT TUNGGAL PRAKARSA Tbk.

Independent Auditor's Report

Report No. RPC-7004/PSS/2015

The Shareholders, the Boards of Commisioners and Directors

PT. Indocement Tunggal Prakarsa Tbk

We have audited the accompanying consolidated financial statements of PT indocement Tunggal Prakarsa Tbk ("the company") and its subsidiaries, which comprise the consolidated statement of financal position as of December 31, 2014, and the consolidated statements of comprehensive income, changes in equity, and cash flows for the year then ended, and a summary of significant accounting policies and other expalanatory information.

Management's responsibility for the financial statement

Management is responsible for the preparation and fair presentation of such consolidated financial statement in accordance with indonesian Financial Accounting Standard, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, wheter due to fraud of error.

Auditor's responsibility

Our responsibility is to express an opinion on such consolidated financial statements based on our audit. we conducted our auditin accordance with standards  on auditing established by the indonesian institute of certified public accountants. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether such consolidated financial statementsare free from material misstatement. an audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the Auditor's judgment, including the assesment of the risk of material misstatement of the financial statement, whether due to farud or error. in making those risk assesment, the auditor consider internal control relevant to the entity's preparation and fair presentation of the financial statementsin order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectuveness of the entity's internal control. an audit also includes evaluating the appropriateness of accounting policies used and the reasonablesness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auidt opinion.

Opinion

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of PT Indocement Tunggal Prakarsa Tbk and its subsidiaries as of December 31, 2014, and their consolidated financial performance and cash flows for the year then ended, in accordance with Indonesian Financial Accounting Standards.

References

Member of group :
Wisnu Reno Wijaya/C1L014012
Erizal Wibisono S/C1L014026
Eko Fajar Sulaiman/C1L014032
Ilham A Pramuditya/C1L014033

Enterprise Risk Management – Integrated Framework COSO

Enterprise Risk Management - Integrated Framework

Enterprise Risk Management – Integrated Framework COSO memiliki 8 komponen yang dijelaskan sebagai berikut:

1. Internal environment (Lingkungan internal)

• Komponen ini berkaitan dengan lingkungan dimana entitas berada dan beroperasi. Cakupannya berupa kultur manajemen tentang risiko, integritas, perspektif terhadap risiko, penerimaan terhadap risik, nilai moral, struktur organisasi, dan pendelegasian wewenang

2. Objective setting (Penentuan tujuan)

• Manajemen harus menetapkan tujuan-tujuan dari entitas agar dapat mengidentifikasi, mengakses, dan mengelola risiko.

3. Event identification (Identifikasi kejadian)

• Identifikasi kejadian-kejadian potensial baik yang terjadi di lingkungan internal maupun eksternal entitas yang mempengaruhi strategi atau pencapaian tujuan dari entitas.

4. Risk assessment (Penilaian risiko)

• Secara singkat risk assessment adalah proses menilai sejauh mana dampak dari kejadian atau keadaan dapat mengganggu pencapaian dari tujuan entitas.

5. Risk response (Respon terhadap risiko)

• Setelah menilai tingkat risiko, organisasi harus menentukan sikap atas hasil penilaian risiko tersebut. 

6. Control activities (Aktifitas-aktifitas pengendalian)

• Berperanan dalam penyusunan kebijakan dan prosedur untuk menjamin risk response terlaksana dengan efektif.

7. Information and communication (Informasi dan komunikasi)

• Komponen ini adalah berkaitan dengan penyampaian informasi yang relevan kepada pihak terkait melalui media komunikasi yang sesuai. Faktor-faktor yang perlu diperhatikan dalam penyampaiaan informasi dan komunikasi adalah kualitas informasi, arah komunikasi, dan alat komunikasi.

8. Monitoring

• Monitoring dapat dilaksanakan baik secara terus menerus maupun terpisah. Aktifitas monitoring ongoing tercermin pada aktivitas supervisi, rekonsiliasi, dan aktivitas rutin lainnya. Monitoring terpisah biasanya dilakukan untuk penugasan tertentu. Pada monitoring ini ditentukan scope tugas, frekuensi, proses evaluasi metodologi, dokumentasi, dan action plan.

Ilham Anugraha Pramuditya

C1L014033

Akuntansi Internasional

Universitas Jenderal Soedirman

Referensi

Internal Control – Integrated Framework COSO 2013

Internal Control - Integrated Framework (2013)

COSO telah menghasilkan produk berupa Internal Control – Integrated Framework (1992) dan Enterprise Risk Management – Integrated Framework (1994). Pada Integrated Framework COSO edisi terbaru (2013) mendefinisikan pengendalian internal sebagai berikut “Process, effected by an entity’s board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting, and compliance” atau jika dalam bahasa Indonesia berarti “Proses yang dipengaruhi oleh dewan entitas direksi, manajemen, dan personel lain, yang dirancang untuk memberikan keyakinan memadai tentang pencapaian tujuan yang berkaitan dengan operasi, pelaporan, dan kepatuhan”.

Tujuan dari Internal Control terdiri atas operations, reporting, dan compliance dengan penjelasan sebagai berikut:

1. Operations Objectives, tujuan operasional terkait dengan pencapaian tujuan/objective yang berorientasi pada visi, misi suatu entitas. Tujuan ini terkait dengan enviromental practices, produktivitas, kualitas, financial performance, return of assets, dan likuiditas.
2. Reporting Objectives, tujuan ini berkaitan dengan penyusunan laporan yang digunakan oleh entitas dan stakeholders dalam menyusun pelaporan finansial/non-finansial serta pelaporan eksternal/internal.
3. Compliance Objectives, aturan dan hukum merupakan standar atas perilaku suatu entitas dan diharapkan dapat mengimplementasikan standar tersebut atau standar yang lebih tinggi ke dalam tujuan dari entitas tersebut.

Selain tujuan, Internal Control memiliki komponen yang didalamnya terdapat beberapa prinsip, penjelasannya sebagai berikut:

1. Control Environment, merupakan standar proses dan struktur yang mendasari entitas dalam pelaksanaan Internal Control. Berikut prinsip yang terdapat pada Control Environment:

Entitas berkomitmen terhadap integritas dan nilai-nilai etika

• Board of directors bekerja secara independensi dan melaksanakan pengawasan terhadap pengembangan dan pelaksanaan Internal Control pada manajemen.
• Dengan pengawasan Board of Director, manajemen akan menetapkan bentuk pelaporan, struktur, tanggung jawab dan otoritas yang diperlukan dalam rangka pencapaian tujuan.
• Entitas menetapkan komitmen, mengembangkannya, dan mempertahankan individu yang kompeten dalam rangka pencapaian tujuan.
• Entitas memegang individu yang bertanggungjawab dalam Internal Control dalam rangka pencapaian tujuan.

2. Risk Assessment, melibatkan proses yang berulang dan dinamis untuk mengidentifikasi dan menganalisis risiko untuk tercapainya tujuan dan membentuk dasar tentang pengelolaan risiko. Berikut prinsip yang berkaitan dengan Risk Assessment yaitu:

• Entitas menentukan tujuan yang spesifik yang dapat identifikasi dan dinilai risikonya terkait dengan tujuan.
• Entitas mengidentifikasi risiko yang terkait dengan pencapaian tujuan dan menganalisis risiko yang menjadi dasar pengelolaan terhadap risiko tersebut.
• Entitas mempertimbangkan potensi fraud dalam penilaian risiko.
• Entitas mengidentifikasi dan menilai seberapa signifikan perubahan memengaruhi sistem pengendalian internal.

3. Control Activities, merupakan tindakan berupa prosedur dan kebijakan yang ditetapkan untuk meyakinkan bahwa manajemen telah berupaya untuk memitigasi risiko untuk dapat mencapai tujuan. Berikut prinsip dalam Control Activities yaitu:

• Entitas memilih dan mengembangkan aktivitas pengendalian yang berkontribusi terhadap mitigasi risiko untuk dapat mencapai tujuan.
• Entitas memilih dan mengembangkan aktivitas pengendalian secara umum terkait dengan teknologi untuk dapat mencapai tujuan.
• Entitas menyebarkan aktivitas pengendalian melalui prosedur dan kebijakan dalam penerapannya.

4. Information and Communication, informasi diperlukan dalam pelaksanaan tanggung jawab Internal Control nya dalam mencapai tujuan. Sedangkan komunikasi terjadi secara internal maupun eksternal dengan menyediakan informasi yang diperlukan dalam pelaksanaan Internal Control sehari-hari. Berikut prinsip dalam Information and Communication yaitu:

• Entitas memperoleh dan menggunakan informasi yang relevan dan berkualitas dalam mendukung fungsi dari komponen lain dalam Internal Control.
• Entitas secara internal mengomunikasikan informasi, tujuan dan tanggung jawab Internal Control dalam fungsi dari komponen lain dari Internal Control.
• Entitas berkomunikasi dengan pihak eksternal terkait hal yang mempengaruhi fungsi dari komponen lain dalam Internal Control.

5. Monitoring Activity, evaluasi berkelanjutan dan/atau terpisah untuk memastikan seluruh komponen Internal Control  tersedia dan berfungsi. Terdapat prinsip dalam Monitoring Activity yaitu:

• Entitas memilih, mengembangkan, dan melaksanakan evaluasi berkelanjutan dan/atau terpisah untuk memastikan seluruh komponen Internal Control tersedia dan berfungsi.
• Entitas mengevaluasi dan mengomunikasikan defisiensi Internal Control pada pihak yang bertanggung jawab agar diambil tindakan korektif.

Dari penjelasan di atas, maka perubahan yang terjadi dengan terbitnya Internal Control – Integrated Framework yang baru (2013) adalah sebagai berikut:

1. Kerangka COSO (2013) ini menjelaskan bahwa prinsip dimaksudkan untuk profit companies, non-profit companies, badan pemerintah dan organisasi lainnya. Prinsip inilah yang akan membantu manajemen untuk menilai entitas, apakah telah memiliki Internal Control yang efektif atau belum.
2. Menjelaskan peran penetapan tujuan yang diperluas dengan mempertimbangkan kesesuaiannya, tidak hanya memperhatikan proses manajemen sebelum melakukan Internal Control.
3. Mempertimbangkan ekspektasi yang lebih besar terhadap kompetensi dan akuntabilitas. Organisasi bisa menggeser model operasi dengan mendelegasikan kewenangan dan akuntabilitas yang lebih besar.
4. Mempertimbangkan pelaporan eksternal di luar pelaporan keuangan serta pelaporan internal baik keuangan maupun non-keuangan dengan memperluas kategori reporting objectives.
5. Mempertimbangkan apa yang dilakukan dengan undang-undang, peraturan, dan standar dengan mengakui peran regulator dan standard dalam penetapan tujuan dan dalam menetapkan kriteria untuk menilai dan melaporkan efisiensi Internal Control.
6. Mencakup perubahan dalam struktur legal entitas, akuntabilitas dan tanggung jawab terkait Internal Control, dan model operasi manajemen, dalam unit dan sub-unit serta mempertimbangkan risiko internal yang berhubungan dengan merger dan akuisisi dengan mempertimbangkan globalisasi.
7. Menggambarkan peningkatan relevansi teknologi yang berpengaruh pada bagaimana komponen Internal Control dilaksanakan.
8. Memperluas konsep governance yang terkait dengan board of directors, commitee of the board, audit, kompensasi, dan komite governance.
9. Memuat lebih banyak pembahasan mengenai fraud termasuk diantaranya potensi fraud yang merupakan prinsip Internal Control.
10. Mempertimbangkan struktur organisasi dan model bisnis yang telah banyak mengalami perubahan, diantaranya tanggung jawab Internal Control dari tiap model, dan pencapaian Internal Control yang efektif.

Ilham Anugraha Pramuditya

C1L014033

Akuntansi Internasional

Universitas Jenderal Soedirman

Referensi

Internal Control

Internal control atau pengendalian intern merupakan kegiatan yang dilakukan entitas untuk melakukan pengawasan, pengendalian dan pengukuran terhadap kinerja (operasional, kepatuhan dengan regulasi dan pelaporan keuangan) yang dirancang untuk mencapai tujuan tertentu yang melibatkan seluruh komponen yang ada pada entitas (manusia, mesin, sistem informasi, sistem akuntansi). Hal ini juga bertujuan untuk meminimalisir dan mendeteksi kecurangan, sehingga kinerja pada suatu entitas tetap berlangsung efektif dan efisien.

Mengapa auditor perlu memahami dan menguji internal control dalam suatu entitas ?

Karena internal control sangat berpengaruh terhadap pencapaian yang maksimal pada suatu entitas dalam menjalankan proses kinerja. Maka sebelum melakukan audit, seorang auditor harus mengetahui secara mendetail terhadap: 

1. Operasional, hal ini bertujuan agar auditor bisa mengetahui kegiatan apa saja yang sesuai/tidak sesuai dengan operasional yang dibuat oleh suatu entitas. 
2. Kepatuhan dengan peraturan dan regulasi, hal ini bertujuan agar auditor bisa mengetahui kesesuaian kegiatan yang dilakukan pada entitas tersebut dengan peraturan dan regulasi yang ada. 
3. Pelaporan keuangan, hal ini bertujuan agar auditor bisa mengetahui laporan keuangan yang dibuat selama ini sesuai dengan standar akuntasi keuangan yang berlaku dan bisa dipertanggungjawabkan oleh entitas atau tidak.

Setelah memahami dan menguji internal control dari entitas tersebut, auditor akan mengetahui proses kinerja yang sudah dilakukan. Hasil pengujian ini akan menjadi dasar sebagai informasi dan pertimbangan saat auditor melakukan audit.

Ilham Anugraha Pramuditya

C1L014033

Akuntansi Internasional

Universitas Jenderal Soedirman

Referensi:

- wikipedia
- keuanganlsm