MBU652 Financial Statement Analysis with answers

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MBU652 Financial Statement Analysis with answers

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

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