Telhanorte Financial Statements: A Brief Overview

Telhanorte, a prominent Brazilian retailer specializing in construction materials, home improvement products, and related services, publishes financial statements to provide stakeholders with insights into its financial performance and position. These statements, prepared in accordance with Brazilian accounting standards (generally aligned with IFRS), are crucial for assessing the company’s profitability, solvency, and operational efficiency.

Key Financial Statements

Telhanorte’s financial statements typically include the following core components:

• Balance Sheet (Balanço Patrimonial): This statement presents a snapshot of the company’s assets, liabilities, and equity at a specific point in time. Assets are categorized as current (e.g., cash, accounts receivable, inventory) and non-current (e.g., property, plant, and equipment, intangible assets). Liabilities are similarly classified as current (e.g., accounts payable, short-term debt) and non-current (e.g., long-term debt). Equity represents the owners’ stake in the company. Analyzing the balance sheet helps assess Telhanorte’s liquidity, financial leverage, and net worth.
• Income Statement (Demonstração do Resultado do Exercício – DRE): The income statement reports Telhanorte’s revenues, expenses, and profits (or losses) over a specific period (e.g., a quarter or a year). It starts with revenues generated from sales, then deducts the cost of goods sold to arrive at gross profit. Operating expenses, such as selling, general, and administrative expenses, are then subtracted to determine operating profit (EBIT). Interest expense and taxes are subsequently deducted to arrive at net profit. The income statement is vital for evaluating Telhanorte’s profitability and operational efficiency.
• Statement of Cash Flows (Demonstração do Fluxo de Caixa – DFC): This statement tracks the movement of cash both into and out of Telhanorte during a specific period. Cash flows are categorized into three activities: operating (related to the company’s core business), investing (related to the purchase and sale of long-term assets), and financing (related to debt, equity, and dividends). The statement of cash flows provides insights into Telhanorte’s ability to generate cash, meet its obligations, and fund its growth.
• Statement of Changes in Equity (Demonstração das Mutações do Patrimônio Líquido – DMPL): This statement reconciles the beginning and ending balances of each component of equity (e.g., share capital, retained earnings). It reflects changes due to profits, dividends, share issuances, and other equity transactions. The DMPL provides a comprehensive view of how Telhanorte’s equity has changed over time.
• Explanatory Notes (Notas Explicativas): These notes provide detailed explanations and supplementary information about the items presented in the financial statements. They include accounting policies adopted, breakdowns of specific line items, details about debt obligations, and contingent liabilities. The notes are crucial for understanding the context and limitations of the financial statements.

Analyzing Telhanorte’s Financial Statements

Investors, creditors, and other stakeholders use financial statement analysis techniques to evaluate Telhanorte’s performance. Common techniques include ratio analysis (e.g., profitability ratios, liquidity ratios, solvency ratios) and trend analysis (comparing financial results over time). Analyzing these statements helps stakeholders make informed decisions about investing in, lending to, or doing business with Telhanorte. Accessing these statements directly from Telhanorte’s investor relations page or regulatory filings (such as with the CVM, Brazil’s securities regulator) is recommended to ensure the information’s accuracy and completeness.