Net result is a destination, not the route. The ESG decomposes that route into two cascading tables: result formation, then determination of self-financing. It shows where value arises, where it is consumed and what may remain to fund the enterprise.
The TFR cascade
- Gross margin on resale.
- Period production and consumption.
- Value added.
- Gross operating surplus or insufficiency.
- Operating result.
- Financial, current and non-current results.
- Net result.
- CAF/IAF, then self-financing.
1. From sales to value added
For trading, gross margin on resale compares merchandise sales with purchases resold. Period production groups sales of produced goods/services, product-stock change and own capitalised production. Consumption includes consumed purchases and other external expenses.
| Balance | Simple reading |
|---|---|
| Gross margin | what trading retains before other expenses |
| Production | produced activity for the period |
| Consumption | materials/supplies and external services consumed |
| Value added | wealth created after external consumption |
Higher value added may come from volume, price, mix, internalisation or cut-off. Open components before celebrating.
2. From value added to EBE
The TFR adds operating grants and subtracts taxes and payroll to obtain EBE, or IBE if negative. This precedes depreciation, provisions and financial result.
| Change | Questions |
|---|---|
| EBE rises | margin, volume, grant, productivity or timing? |
| EBE falls | purchase, external, payroll, price or waste? |
| VA rises, EBE falls | does payroll/tax absorb creation? |
| EBE positive, cash weak | customers, stock, liabilities or investment? |
EBE is operating performance, not a bank balance or available cash flow.
3. Travel to net result
Other operating income/expenses and charges/reversals lead to operating result. Financial leads to current result; non-current and tax lead to net.
- Compare operations with budget.
- Separate debt cost and FX effect.
- Identify each non-current item.
- Check whether one event carries net result.
- Link charges/reversals to inventory files.
- Explain the change from prior year.
A retailer can improve gross margin while net result worsens if payroll, rent, depreciation or financing rises faster.
ESG is not always required under the simplified model
Published law conditionally permits simplified balance sheet/CPC and chart. A small company may still use management balances internally; do not automatically call them its statutory statement.
4. Distinguish CAF and self-financing
The second table starts from net result and neutralises specified calculated income/expenses and disposals to derive cash-generating capacity or insufficiency under CGNC presentation. Self-financing is then CAF minus profit distributions.
- Net result: performance after all levels
- CAF: calculated potential internal resource, not bank balance
- Distribution: outflow decided from profits
- Self-financing: CAF retained after distributions
- Actual cash: also depends on BFG, investment and funding
BelloPOS may illuminate upstream recorded sales, discounts, quantities and configured costs. It does not calculate statutory ESG or CAF from complete accounts.
Mistakes to avoid
- Jumping to net.
- Calling EBE cash.
- Mixing purchases with purchases consumed.
- Ignoring product-stock change.
- Calling CAF bank balance.
- Comparing changing scope.
Frequently asked questions
What does ESG mean?
État des Soldes de Gestion, made of the result-formation table and self-financing table.
How is value added formed?
In the CGNC cascade it combines gross margin and production, then subtracts period consumption.
Is EBE treasury?
No. It precedes several accounting items and excludes customer, stock, supplier, investment and funding changes.
Are CAF and self-financing identical?
No. Self-financing is CAF minus profit distributions in the CGNC table.
Does BelloPOS calculate ESG?
No. It supplies selected operating indicators; ESG comes from accounts and closing treatments.
What to take away
ESG helps when balances are not treated as scores: open every level, connect it to accounts and explain its path to cash and funding.
Sources
The figures and rules quoted above come from these pages, read on the date given in the article.
- Ministry of Economy and Finance, General Code of Accounting Standardisation, read 1 September 2026
- Ministry of Economy and Finance, Law 44-03 amending Accounting Obligations Law 9-88, read 1 September 2026
Watch operating causes early
Break down sales, quantities, discounts and configured costs before effects reach annual accounts.
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