Submit Search
Upload
Chapter 3 financial statements and ratio analysis
•
Download as PPT, PDF
•
11 likes
•
4,615 views
Michael Ong
Follow
2012 pearson education 13th edition lawrence j. gitman chad j. zutter
Read less
Read more
Economy & Finance
Business
Report
Share
Report
Share
1 of 13
Download now
Recommended
Financialmarket and institutions
Financialmarket and institutions
Trâm Phạm
Managerial fianace chapter 4
Managerial fianace chapter 4
Hafeez Abdullah
Principles of Managerial Finance
Principles of Managerial Finance
Maged Elsakka
GITMAN Chapter 1
GITMAN Chapter 1
Mikee Bylss
Introduction To Financial Institutions And Markets
Introduction To Financial Institutions And Markets
itsvineeth209
4. ch 6 financial statement analysis
4. ch 6 financial statement analysis
irfan_1
Financial Management Ch 06
Financial Management Ch 06
Sayyed Naveed Ali
Chapter 2 Financial Markets & Institutions
Chapter 2 Financial Markets & Institutions
Mikee Bylss
Recommended
Financialmarket and institutions
Financialmarket and institutions
Trâm Phạm
Managerial fianace chapter 4
Managerial fianace chapter 4
Hafeez Abdullah
Principles of Managerial Finance
Principles of Managerial Finance
Maged Elsakka
GITMAN Chapter 1
GITMAN Chapter 1
Mikee Bylss
Introduction To Financial Institutions And Markets
Introduction To Financial Institutions And Markets
itsvineeth209
4. ch 6 financial statement analysis
4. ch 6 financial statement analysis
irfan_1
Financial Management Ch 06
Financial Management Ch 06
Sayyed Naveed Ali
Chapter 2 Financial Markets & Institutions
Chapter 2 Financial Markets & Institutions
Mikee Bylss
GITMAN Chapter 2 Financial Statement Analysis
GITMAN Chapter 2 Financial Statement Analysis
Mikee Bylss
Mishkin fmi9ge ppt_c01
Mishkin fmi9ge ppt_c01
Dr. Muath Asmar
Chap 1 an overview of financial management
Chap 1 an overview of financial management
Kumar Sunny
Chapter 1 - Introduction to Money and the Financial System
Chapter 1 - Introduction to Money and the Financial System
Dr. John V. Padua
Chapter 1: Overview of Financial Management
Chapter 1: Overview of Financial Management
Mikee Bylss
03 edited
03 edited
Abraish Georgeous
Chapter 13 Capital Structure And Leverage
Chapter 13 Capital Structure And Leverage
Alamgir Alwani
Chapter 3 - Time Value of Money
Chapter 3 - Time Value of Money
umarhnasution
Mishkin ch01
Mishkin ch01
Premkumar Balaraman
Investment Settings
Investment Settings
Sunanda Sarker
Chapter 1 - the role of financial management
Chapter 1 - the role of financial management
Prafulla Tekriwal
Ch01 mish11 embfm
Ch01 mish11 embfm
Rob Sears
Chapter 1 role of managerial finance
Chapter 1 role of managerial finance
Michael Ong
Portfolio Mgt Ch 01 The Investment Setting
Portfolio Mgt Ch 01 The Investment Setting
Salik Sazzad
Chapter 1.An Introduction to Finance ppt
Chapter 1.An Introduction to Finance ppt
ZahraMirzayeva
8. stock valuation
8. stock valuation
AfiqEfendy Zaen
The Financial Market Environment
The Financial Market Environment
Qasim Khan
9780273713654 pp05
9780273713654 pp05
Dasrat goswami
Portfolio management process
Portfolio management process
Nagarjuna Kalluru
Time Value of Money
Time Value of Money
Maged Elsakka
gitman_pmf13_ppt03.ppt
gitman_pmf13_ppt03.ppt
ssuser1ecf25
7381396 (1).pptx
7381396 (1).pptx
AhmadAlzoabi
More Related Content
What's hot
GITMAN Chapter 2 Financial Statement Analysis
GITMAN Chapter 2 Financial Statement Analysis
Mikee Bylss
Mishkin fmi9ge ppt_c01
Mishkin fmi9ge ppt_c01
Dr. Muath Asmar
Chap 1 an overview of financial management
Chap 1 an overview of financial management
Kumar Sunny
Chapter 1 - Introduction to Money and the Financial System
Chapter 1 - Introduction to Money and the Financial System
Dr. John V. Padua
Chapter 1: Overview of Financial Management
Chapter 1: Overview of Financial Management
Mikee Bylss
03 edited
03 edited
Abraish Georgeous
Chapter 13 Capital Structure And Leverage
Chapter 13 Capital Structure And Leverage
Alamgir Alwani
Chapter 3 - Time Value of Money
Chapter 3 - Time Value of Money
umarhnasution
Mishkin ch01
Mishkin ch01
Premkumar Balaraman
Investment Settings
Investment Settings
Sunanda Sarker
Chapter 1 - the role of financial management
Chapter 1 - the role of financial management
Prafulla Tekriwal
Ch01 mish11 embfm
Ch01 mish11 embfm
Rob Sears
Chapter 1 role of managerial finance
Chapter 1 role of managerial finance
Michael Ong
Portfolio Mgt Ch 01 The Investment Setting
Portfolio Mgt Ch 01 The Investment Setting
Salik Sazzad
Chapter 1.An Introduction to Finance ppt
Chapter 1.An Introduction to Finance ppt
ZahraMirzayeva
8. stock valuation
8. stock valuation
AfiqEfendy Zaen
The Financial Market Environment
The Financial Market Environment
Qasim Khan
9780273713654 pp05
9780273713654 pp05
Dasrat goswami
Portfolio management process
Portfolio management process
Nagarjuna Kalluru
Time Value of Money
Time Value of Money
Maged Elsakka
What's hot
(20)
GITMAN Chapter 2 Financial Statement Analysis
GITMAN Chapter 2 Financial Statement Analysis
Mishkin fmi9ge ppt_c01
Mishkin fmi9ge ppt_c01
Chap 1 an overview of financial management
Chap 1 an overview of financial management
Chapter 1 - Introduction to Money and the Financial System
Chapter 1 - Introduction to Money and the Financial System
Chapter 1: Overview of Financial Management
Chapter 1: Overview of Financial Management
03 edited
03 edited
Chapter 13 Capital Structure And Leverage
Chapter 13 Capital Structure And Leverage
Chapter 3 - Time Value of Money
Chapter 3 - Time Value of Money
Mishkin ch01
Mishkin ch01
Investment Settings
Investment Settings
Chapter 1 - the role of financial management
Chapter 1 - the role of financial management
Ch01 mish11 embfm
Ch01 mish11 embfm
Chapter 1 role of managerial finance
Chapter 1 role of managerial finance
Portfolio Mgt Ch 01 The Investment Setting
Portfolio Mgt Ch 01 The Investment Setting
Chapter 1.An Introduction to Finance ppt
Chapter 1.An Introduction to Finance ppt
8. stock valuation
8. stock valuation
The Financial Market Environment
The Financial Market Environment
9780273713654 pp05
9780273713654 pp05
Portfolio management process
Portfolio management process
Time Value of Money
Time Value of Money
Similar to Chapter 3 financial statements and ratio analysis
gitman_pmf13_ppt03.ppt
gitman_pmf13_ppt03.ppt
ssuser1ecf25
7381396 (1).pptx
7381396 (1).pptx
AhmadAlzoabi
Financial ratios and their use in understanding Financial Statements
Financial ratios and their use in understanding Financial Statements
Pranav Dedhia
Bba 2204 fin mgt week 3 financial ratios
Bba 2204 fin mgt week 3 financial ratios
Stephen Ong
gty
gty
Maulik Joshi
Financial Statement Analysis
Financial Statement Analysis
Maged Elsakka
Financial statement analysis
Financial statement analysis
yashikagupta48
Introduction 3(1)
Introduction 3(1)
Ezgi Kurt
Financial Analysis
Financial Analysis
Buying Papers Online College Cleveland State University
Fundamentals of Financial Ratio Analysis
Fundamentals of Financial Ratio Analysis
B.V. Raghavendra
INTRODUCTON TO HEALTHCARE FINANCE
INTRODUCTON TO HEALTHCARE FINANCE
Ahmad Thanin
Financial Report and Ratio Analysis of Square Pharmaceuticals Limited
Financial Report and Ratio Analysis of Square Pharmaceuticals Limited
MD TOWFIQUR RAHMAN
barringer4e_08.ppt
barringer4e_08.ppt
Khurram Shahzad
08 eng104-bai 4-v1.0
08 eng104-bai 4-v1.0
Yen Dang
Ratio analysis1
Ratio analysis1
Aakriti Rohatgi
FINANCIAL-STATEMENT-FINAL (1).pptx
FINANCIAL-STATEMENT-FINAL (1).pptx
lhaniemadro
presentationjalal(2) (1).pptx analysis of financial management
presentationjalal(2) (1).pptx analysis of financial management
AzharMahmoodMahmood
UNIT-IV MEASURING BUSINESS PERFORMANCE..
UNIT-IV MEASURING BUSINESS PERFORMANCE..
pushpait
Summary on financial viability
Summary on financial viability
Duncan Chapple
Financial statement analysis
Financial statement analysis
Anish Maman
Similar to Chapter 3 financial statements and ratio analysis
(20)
gitman_pmf13_ppt03.ppt
gitman_pmf13_ppt03.ppt
7381396 (1).pptx
7381396 (1).pptx
Financial ratios and their use in understanding Financial Statements
Financial ratios and their use in understanding Financial Statements
Bba 2204 fin mgt week 3 financial ratios
Bba 2204 fin mgt week 3 financial ratios
gty
gty
Financial Statement Analysis
Financial Statement Analysis
Financial statement analysis
Financial statement analysis
Introduction 3(1)
Introduction 3(1)
Financial Analysis
Financial Analysis
Fundamentals of Financial Ratio Analysis
Fundamentals of Financial Ratio Analysis
INTRODUCTON TO HEALTHCARE FINANCE
INTRODUCTON TO HEALTHCARE FINANCE
Financial Report and Ratio Analysis of Square Pharmaceuticals Limited
Financial Report and Ratio Analysis of Square Pharmaceuticals Limited
barringer4e_08.ppt
barringer4e_08.ppt
08 eng104-bai 4-v1.0
08 eng104-bai 4-v1.0
Ratio analysis1
Ratio analysis1
FINANCIAL-STATEMENT-FINAL (1).pptx
FINANCIAL-STATEMENT-FINAL (1).pptx
presentationjalal(2) (1).pptx analysis of financial management
presentationjalal(2) (1).pptx analysis of financial management
UNIT-IV MEASURING BUSINESS PERFORMANCE..
UNIT-IV MEASURING BUSINESS PERFORMANCE..
Summary on financial viability
Summary on financial viability
Financial statement analysis
Financial statement analysis
Recently uploaded
Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...
Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...
Amil baba
Financial analysis on Risk and Return.ppt
Financial analysis on Risk and Return.ppt
tadegebreyesus
Money Forward Integrated Report “Forward Map” 2024
Money Forward Integrated Report “Forward Map” 2024
Money Forward
Banking: Commercial and Central Banking.pptx
Banking: Commercial and Central Banking.pptx
ANTHONYAKINYOSOYE1
The AES Investment Code - the go-to counsel for the most well-informed, wise...
The AES Investment Code - the go-to counsel for the most well-informed, wise...
AES International
2024 Q1 Crypto Industry Report | CoinGecko
2024 Q1 Crypto Industry Report | CoinGecko
CoinGecko
Uae-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Ra...
Uae-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Ra...
Amil baba
Kempen ' UK DB Endgame Paper Apr 24 final3.pdf
Kempen ' UK DB Endgame Paper Apr 24 final3.pdf
Henry Tapper
Unveiling Poonawalla Fincorp’s Phenomenal Performance Under Abhay Bhutada’s L...
Unveiling Poonawalla Fincorp’s Phenomenal Performance Under Abhay Bhutada’s L...
beulahfernandes8
The top 4 AI cryptocurrencies to know in 2024 .pdf
The top 4 AI cryptocurrencies to know in 2024 .pdf
Jhon Thompson
AnyConv.com__FSS Advance Retail & Distribution - 15.06.17.ppt
AnyConv.com__FSS Advance Retail & Distribution - 15.06.17.ppt
PriyankaSharma89719
Financial Preparation for Millennia.pptx
Financial Preparation for Millennia.pptx
simon978302
Gender and caste discrimination in india
Gender and caste discrimination in india
vandanasingh01072003
『澳洲文凭』买科廷大学毕业证书成绩单办理澳洲Curtin文凭学位证书
『澳洲文凭』买科廷大学毕业证书成绩单办理澳洲Curtin文凭学位证书
rnrncn29
Introduction to Health Economics Dr. R. Kurinji Malar.pptx
Introduction to Health Economics Dr. R. Kurinji Malar.pptx
DrRkurinjiMalarkurin
Liquidity Decisions in Financial management
Liquidity Decisions in Financial management
shrutisingh143670
NO1 Certified kala jadu karne wale ka contact number kala jadu karne wale bab...
NO1 Certified kala jadu karne wale ka contact number kala jadu karne wale bab...
Amil baba
Overview of Inkel Unlisted Shares Price.
Overview of Inkel Unlisted Shares Price.
Precize Formely Leadoff
Global Economic Outlook, 2024 - Scholaride Consulting
Global Economic Outlook, 2024 - Scholaride Consulting
swastiknandyofficial
Stock Market Brief Deck FOR 4/17 video.pdf
Stock Market Brief Deck FOR 4/17 video.pdf
Michael Silva
Recently uploaded
(20)
Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...
Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...
Financial analysis on Risk and Return.ppt
Financial analysis on Risk and Return.ppt
Money Forward Integrated Report “Forward Map” 2024
Money Forward Integrated Report “Forward Map” 2024
Banking: Commercial and Central Banking.pptx
Banking: Commercial and Central Banking.pptx
The AES Investment Code - the go-to counsel for the most well-informed, wise...
The AES Investment Code - the go-to counsel for the most well-informed, wise...
2024 Q1 Crypto Industry Report | CoinGecko
2024 Q1 Crypto Industry Report | CoinGecko
Uae-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Ra...
Uae-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Ra...
Kempen ' UK DB Endgame Paper Apr 24 final3.pdf
Kempen ' UK DB Endgame Paper Apr 24 final3.pdf
Unveiling Poonawalla Fincorp’s Phenomenal Performance Under Abhay Bhutada’s L...
Unveiling Poonawalla Fincorp’s Phenomenal Performance Under Abhay Bhutada’s L...
The top 4 AI cryptocurrencies to know in 2024 .pdf
The top 4 AI cryptocurrencies to know in 2024 .pdf
AnyConv.com__FSS Advance Retail & Distribution - 15.06.17.ppt
AnyConv.com__FSS Advance Retail & Distribution - 15.06.17.ppt
Financial Preparation for Millennia.pptx
Financial Preparation for Millennia.pptx
Gender and caste discrimination in india
Gender and caste discrimination in india
『澳洲文凭』买科廷大学毕业证书成绩单办理澳洲Curtin文凭学位证书
『澳洲文凭』买科廷大学毕业证书成绩单办理澳洲Curtin文凭学位证书
Introduction to Health Economics Dr. R. Kurinji Malar.pptx
Introduction to Health Economics Dr. R. Kurinji Malar.pptx
Liquidity Decisions in Financial management
Liquidity Decisions in Financial management
NO1 Certified kala jadu karne wale ka contact number kala jadu karne wale bab...
NO1 Certified kala jadu karne wale ka contact number kala jadu karne wale bab...
Overview of Inkel Unlisted Shares Price.
Overview of Inkel Unlisted Shares Price.
Global Economic Outlook, 2024 - Scholaride Consulting
Global Economic Outlook, 2024 - Scholaride Consulting
Stock Market Brief Deck FOR 4/17 video.pdf
Stock Market Brief Deck FOR 4/17 video.pdf
Chapter 3 financial statements and ratio analysis
1.
Copyright © 2012
Pearson Education Chapter 3 Financial Statements and Ratio Analysis
2.
© 2012 Pearson
Education 3-2 The Stockholders’ Report • Generally accepted accounting principles (GAAP) are the practice and procedure guidelines used to prepare and maintain financial records and reports; authorized by the Financial Accounting Standards Board (FASB).
3.
© 2012 Pearson
Education 3-3 The Four Key Financial Statements: The Income Statement • The income statement provides a financial summary of a company’s operating results during a specified period. • The balance sheet presents a summary of a firm’s financial position at a given point in time. • The statement balances the firm’s assets (what it owns) against its financing, which can be either debt (what it owes) or equity (what was provided by owners).
4.
© 2012 Pearson
Education 3-4 The Four Key Financial Statements: Statement of Retained Earnings •The statement of retained earnings reconciles the net income earned during a given year, and any cash dividends paid, with the change in retained earnings between the start and the end of that year. •The statement of cash flows provides a summary of the firm’s operating, investment, and financing cash flows and reconciles them with changes in its cash and marketable securities during the period. •Also ties together the income statement and previous and current balance sheets.
5.
© 2012 Pearson
Education 3-5 Using Financial Ratios: Interested Parties • Ratio analysis involves methods of calculating and interpreting financial ratios to analyze and monitor the firm’s performance. • Current and prospective shareholders are interested in the firm’s current and future level of risk and return, which directly affect share price. • Creditors are interested in the short-term liquidity of the company and its ability to make interest and principal payments. • Management is concerned with all aspects of the firm’s financial situation, and it attempts to produce financial ratios that will be considered favorable by both owners and creditors.
6.
© 2012 Pearson
Education 3-6 Using Financial Ratios: Types of Ratio Comparisons • Cross-sectional analysis is the comparison of different firms’ financial ratios at the same point in time; involves comparing the firm’s ratios to those of other firms in its industry or to industry averages • Benchmarking is a type of cross-sectional analysis in which the firm’s ratio values are compared to those of a key competitor or group of competitors that it wishes to emulate.
7.
© 2012 Pearson
Education 3-7 Using Financial Ratios: Types of Ratio Comparisons (cont.) • Time-series analysis is the evaluation of the firm’s financial performance over time using financial ratio analysis • Comparison of current to past performance, using ratios, enables analysts to assess the firm’s progress.
8.
© 2012 Pearson
Education 3-8 Ratio Analysis Liquidity Ratios Current ratio = Current assets ÷ Current liabilities
9.
© 2012 Pearson
Education 3-9 Ratio Analysis (cont.) Activity Ratios Inventory turnover = Cost of goods sold ÷ Inventory Average Age of Inventory = 365 ÷ Inventory turnover Total asset turnover = Sales ÷ Total assets
10.
© 2012 Pearson
Education 3-10 Ratio Analysis (cont.)
11.
© 2012 Pearson
Education 3-11 Ratio Analysis (cont.) Debt Ratios Debt ratio = Total liabilities ÷ Total assets
12.
© 2012 Pearson
Education 3-12 Ratio Analysis (cont.) Profitability Ratios
13.
© 2012 Pearson
Education 3-13 Ratio Analysis (cont.) Profitability Ratios Operating profit margin = Operating profits ÷ sales Net profit margin = Earnings available for common stockholders ÷ Sales Return on total assets (ROA) = Earnings available for common stockholders ÷ Total assets Return on Equity (ROE) = Earnings available for common stockholders ÷ Common stock equity
Download now