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MBU652 Financial Statement Analysis with answers
MBU652 Financial Statement Analysis with answers
MBU652 Financial Statement Analysis with answers
MBU652 Financial Statement Analysis with answers
MBU652 Financial Statement Analysis with answers
MBU652 Financial Statement Analysis with answers
MBU652 Financial Statement Analysis with answers
MBU652 Financial Statement Analysis with answers
MBU652 Financial Statement Analysis with answers
MBU652 Financial Statement Analysis with answers
MBU652 Financial Statement Analysis with answers
MBU652 Financial Statement Analysis with answers
MBU652 Financial Statement Analysis with answers
MBU652 Financial Statement Analysis with answers
MBU652 Financial Statement Analysis with answers
MBU652 Financial Statement Analysis with answers
MBU652 Financial Statement Analysis with answers
MBU652 Financial Statement Analysis with answers
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MBU652 Financial Statement Analysis with answers

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  • 1. MBU 652 Financial Decision Making Performance Measurements Profitability, Liquidity, Activity, & Debt (with answers to calculations for analyzing the financial statements from textbook)
  • 2. Categories of a Financial Statement Analysis  Profitability  Liquidity  Activity  Debt (Leverage)
  • 3. Profitability  Return on Assets (ROA)  Return on Equity (ROE)  Price/Earnings Ratio(P/E Ratio)  Dividend Yield  Dividend Pay-Out Ratio
  • 4. Return on Assets (ROA) ROA = ____Net Income___ Average Total Assets ROA = ____107.2___ 1591.7 + 1599.3 / 2 =
  • 5. Return on Equity (ROE) ROE = ___Net Income___ Average Owners’ Equity ROE = ___107.2___ 908.7 + 983.8 / 2 =
  • 6. Price/Earnings Ratio (P/E Ratio) P/E Ratio = Market Price of Common Stock Earnings Per Share P/E Ratio = 90.00_(Market Price) 2.50 (EPS)
  • 7. Dividend Yield Dividend Yield = Annual Dividend per share Market Price Per Share Dividend Yield = _____.50_____ 90.00
  • 8. Dividend Pay-Out Ratio Dividend = Annual Dividend Per Share Pay-Out Ratio Earnings Per Share Dividend = _____.50_____ Pay-Out Ratio 2.50
  • 9. Liquidity  Working Capital  Current Ratio  Acid-Test Ratio
  • 10. Working Capital Current Assets - Current Liabilities Working Capital 672.4 - 205.1 467.3
  • 11. Current Ratio Current Ratio = __Current Assets__ Current Liabilities Current Ratio = __672.4 __ 205.1
  • 12. Acid-Test Ratio Acid-Test = Cash + Accounts Receivable Ratio Current Liabilities Acid-Test = _14.3 + 218.6_ Ratio 205.1
  • 13. Activity  Accounts Receivable Turnover  Inventory Turnover
  • 14. Accounts Receivable Turnover (A/R) A/R Turnover = ____Sales_____ Average A/R A/R Turnover = ____1328.2____ 200.2 + 218.6 / 2
  • 15. Inventory Turnover Inventory = Cost of Goods Sold (COGS) Turnover Average Inventory Inventory = _____876.4______ Turnover 390.0 + 392.2 / 2
  • 16. Debt (Leverage)  Debt Ratio  Debt/Equity Ratio
  • 17. Debt Ratio Debt = ______Total Liabilities_______ Ratio Total Liabilities & Owners’ Equity Debt = ______615.5_______ Ratio 1599.3
  • 18. Debt/Equity Ratio Debt/Equity = __Total Liabilities__ Ratio Total Owners’ Equity Debt/Equity = __615.5__ Ratio 983.8

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