1) The document discusses various techniques for analyzing financial statements, including comparative statements, common size statements, trend analysis, and ratio analysis.
2) Ratio analysis can evaluate balance sheet items, revenue statement items, combined metrics, and ratios based on functions like solvency, activity, and profitability.
3) Financial statement analysis involves comparing financial data over time and between companies to assess performance and financial position.
This document provides an overview of financial statement analysis. It defines key financial statements like the income statement and balance sheet. It then analyzes the balance sheet, income statement, and key financial ratios of Basket Wonders. The analysis compares Basket Wonders' current ratio, acid-test ratio, debt ratios, coverage ratios, and activity ratios to industry averages. The analysis finds that Basket Wonders has a strong current ratio but weak acid-test ratio, indicating potential issues with inventories. It also finds that Basket Wonders has below average interest coverage and declining earnings compared to industry.
The document discusses various techniques for analyzing financial statements, including horizontal analysis, vertical analysis, and ratio analysis. It provides examples of applying these techniques to sample financial statement data. Specific topics covered include liquidity ratios, profitability ratios, solvency ratios, earnings power, irregular items, discontinued operations, extraordinary items, and quality of earnings. Objectives are to understand how to perform financial statement analysis and calculate common financial ratios.
The document discusses various financial statement analysis techniques including comparative statements, common size statements, and trend analysis.
Comparative statements allow comparison between firms, within a firm, and over time. Common size statements express each financial statement item as a percentage of a total to allow comparison. Trend analysis uses a base year to show percentage changes in items over multiple years.
The techniques help analyze profitability, liquidity, and solvency, but consistency is needed and they may provide misleading results if accounting principles change or inflation is not considered. Dynamic analysis uses percentages and absolute data over time while static analysis examines item relationships within a single statement. Reasons for trends in sales and expenses are also outlined.
Financial analysis provides stakeholders with an external view of a company's financial health and outlook based on its financial reports and statements. Key financial issues are highlighted and potential risks and benefits identified. Ratio and trend analysis against industry standards can reveal strengths or weaknesses that may impact profitability or require management attention. The results of financial analysis may indicate areas for further operational or strategic analysis and improve a company's financial efficiency.
Types of financial analysis include:
1. Intra-firm comparison analyzes a business's performance over time to identify trends and help management make policy decisions.
2. Inter-firm comparison analyzes and compares financial variables of two or more businesses to determine their relative strengths and weaknesses.
3. Industry average or standard analysis compares a business's actual results to industry standards to evaluate its performance relative to competitors.
This chapter discusses techniques for forecasting a company's financial requirements, including funds flow analysis and financial forecasting. Funds flow analysis examines changes in working capital and cash flows over time using balance sheets and income statements. There are long-term and short-term funds cycles. Financial forecasting predicts future performance using techniques like trend analysis, relationships between variables, and tying individual forecasts into comprehensive financial statements like income statements, balance sheets, and cash flow forecasts. Forecasts are based on both objective data analysis and subjective judgment in assumptions.
This document provides an overview of financial statement analysis, including:
1) Financial statements form the basis for understanding a business's financial position and assessing historical and prospective performance.
2) Financial analysis includes ratio analysis, cash flow analysis, and trend analysis to understand a business's financial soundness from different perspectives.
3) Financial statements have different meanings and uses for various stakeholders like stockholders, management, creditors, and bankers.
This document discusses financial statement analysis and its importance for business survival and decision making. It outlines key factors like profitability and solvency. Financial statement analysis involves tools like ratio analysis that analyze relationships between financial data to assess a business's past performance, current condition, and future prospects. Common ratios examine aspects like profitability, liquidity, asset use, financial risk, and market indicators.
This document provides an overview of financial statement analysis. It defines key financial statements like the income statement and balance sheet. It then analyzes the balance sheet, income statement, and key financial ratios of Basket Wonders. The analysis compares Basket Wonders' current ratio, acid-test ratio, debt ratios, coverage ratios, and activity ratios to industry averages. The analysis finds that Basket Wonders has a strong current ratio but weak acid-test ratio, indicating potential issues with inventories. It also finds that Basket Wonders has below average interest coverage and declining earnings compared to industry.
The document discusses various techniques for analyzing financial statements, including horizontal analysis, vertical analysis, and ratio analysis. It provides examples of applying these techniques to sample financial statement data. Specific topics covered include liquidity ratios, profitability ratios, solvency ratios, earnings power, irregular items, discontinued operations, extraordinary items, and quality of earnings. Objectives are to understand how to perform financial statement analysis and calculate common financial ratios.
The document discusses various financial statement analysis techniques including comparative statements, common size statements, and trend analysis.
Comparative statements allow comparison between firms, within a firm, and over time. Common size statements express each financial statement item as a percentage of a total to allow comparison. Trend analysis uses a base year to show percentage changes in items over multiple years.
The techniques help analyze profitability, liquidity, and solvency, but consistency is needed and they may provide misleading results if accounting principles change or inflation is not considered. Dynamic analysis uses percentages and absolute data over time while static analysis examines item relationships within a single statement. Reasons for trends in sales and expenses are also outlined.
Financial analysis provides stakeholders with an external view of a company's financial health and outlook based on its financial reports and statements. Key financial issues are highlighted and potential risks and benefits identified. Ratio and trend analysis against industry standards can reveal strengths or weaknesses that may impact profitability or require management attention. The results of financial analysis may indicate areas for further operational or strategic analysis and improve a company's financial efficiency.
Types of financial analysis include:
1. Intra-firm comparison analyzes a business's performance over time to identify trends and help management make policy decisions.
2. Inter-firm comparison analyzes and compares financial variables of two or more businesses to determine their relative strengths and weaknesses.
3. Industry average or standard analysis compares a business's actual results to industry standards to evaluate its performance relative to competitors.
This chapter discusses techniques for forecasting a company's financial requirements, including funds flow analysis and financial forecasting. Funds flow analysis examines changes in working capital and cash flows over time using balance sheets and income statements. There are long-term and short-term funds cycles. Financial forecasting predicts future performance using techniques like trend analysis, relationships between variables, and tying individual forecasts into comprehensive financial statements like income statements, balance sheets, and cash flow forecasts. Forecasts are based on both objective data analysis and subjective judgment in assumptions.
This document provides an overview of financial statement analysis, including:
1) Financial statements form the basis for understanding a business's financial position and assessing historical and prospective performance.
2) Financial analysis includes ratio analysis, cash flow analysis, and trend analysis to understand a business's financial soundness from different perspectives.
3) Financial statements have different meanings and uses for various stakeholders like stockholders, management, creditors, and bankers.
This document discusses financial statement analysis and its importance for business survival and decision making. It outlines key factors like profitability and solvency. Financial statement analysis involves tools like ratio analysis that analyze relationships between financial data to assess a business's past performance, current condition, and future prospects. Common ratios examine aspects like profitability, liquidity, asset use, financial risk, and market indicators.
This document discusses financial statement analysis. It identifies the key financial statements that are analyzed - the balance sheet, income statement, and retained earnings statement. It explains the need for comparative analysis using tools like horizontal analysis, vertical analysis, and ratio analysis to evaluate a company's liquidity, profitability, and solvency. Several examples are provided to demonstrate how to compute ratios for liquidity, profitability, and solvency using information from a company's financial statements.
This document provides an introduction to financial statement analysis. It discusses the key types of financial statements, including the income statement, balance sheet, statement of changes in owner's equity, and statement of changes in financial position. It also outlines different classifications and techniques for analyzing financial statements, such as external vs internal analysis, horizontal vs vertical analysis, comparative statement analysis, trend analysis, common size analysis, funds flow analysis, cash flow analysis, and ratio analysis. The overall purpose is to introduce the reader to how financial statements are constructed and various methods for evaluating the financial and operational performance of a business based on its financial reporting.
This document provides an introduction and overview of financial statement analysis for a travel company called Skylite Tours and Travels. The objectives are to assess past performance, analyze financial statements, understand liquidity, solvency, and profitability. The analysis includes calculating working capital, ratio analysis of current ratio, turnover ratios, and return on capital employed. Trend analysis is also performed on expenses, income, assets, and liabilities over three years. Key findings are that the company has good working capital and ratios. Suggestions include improving cash management and working capital.
Financial analysis involves evaluating financial and other information to make decisions. It follows a six-step process: identify the purpose, analyze the company overview and industry, perform financial analysis techniques, conduct detailed accounting analysis, do a comprehensive analysis, and make a decision. Industry analysis considers competition, barriers, suppliers/buyers power, and business cycles. Business strategy focuses on cost leadership, product differentiation, and core competencies. Quantitative financial analysis systematically examines key financial elements using tools like ratios and cash flow analysis. The goals of financial reporting are to capture a company's business reality and reduce management discretion to provide useful information to investors.
The presentation discusses the importance of financial statement analysis for business survival by analyzing profitability and solvency. It covers the purpose of financial analysis, tools such as ratio analysis and comparative statements, and limitations of only considering financial data without qualitative factors. The document provides examples of various ratios to measure profitability, liquidity, asset management, financial structure, and market performance.
The document outlines key aspects of a course on financial statement analysis, including:
- The course will cover the nature, purpose, and methods of financial statement analysis as well as ratio analysis and its importance.
- Students will learn about the objectives, users, and limitations of financial statement analysis to better evaluate the financial position and performance of companies.
- The course will help students understand various liquidity, profitability, and debt ratios and be able to classify accounting ratios to assess companies' financial health for decision making.
This document summarizes key points from Chapter 11 on equity analysis and valuation. It discusses recasting financial statements to separate recurring from non-recurring earnings components. Earnings persistence, determinants of persistence, and their relevance for forecasting are analyzed. Earnings-based valuation is described, emphasizing the use of earnings and accounting measures to compute company value. The importance of analyzing earning power and forecasting earnings for valuation purposes is also explained. Several tools for equity analysis and techniques for recasting, adjusting, and forecasting earnings are outlined.
This document discusses various types and purposes of financial statement analysis. It describes external analysis conducted by outsiders without access to internal records, and internal analysis by executives with access to internal records. Horizontal analysis compares financial data over several years, while vertical analysis examines the relationship between items in one year's statements. The objectives of financial statement analysis are to understand a firm's profitability and financial position. Ratio analysis is identified as the most common analysis technique.
The document analyzes the business and financial performance of Panasonic and Sony over the period of 2008 to 2011. It includes sections on information gathering, accounting techniques used, and an analysis of the companies' financial performance based on ratios calculated from income statements, balance sheets, and cash flow statements. Key metrics examined include profitability, asset utilization, working capital, debt levels, and changes in owners' equity. The analysis provides a comparison of the financial positions and performance trends of the two electronics companies over the three-year period.
There are three types of financial statement comparisons: intra-company, inter-company, and industry averages. Three tools are used for analysis: horizontal analysis examines trends over time, vertical analysis expresses items as a percent of a base amount, and ratio analysis includes liquidity, solvency, turnover, profitability, and market value ratios. Ratios are calculated to measure different aspects of a company's financial health and are used by creditors, stockholders, and others to evaluate performance.
Financial Analysis of Oswal Woollen Mills Ltd.ishbagga
This document summarizes a study on the financial analysis of Oswal Woollen Mills Ltd. It includes an introduction to the textile industry and company. The objectives are to analyze the company's financial position and performance. Financial statements over 5 years are analyzed using ratios to measure liquidity, asset management, debt management, profitability, and cash flows. Key findings indicate the company finances fixed and current assets from long term sources, improving liquidity. In conclusion, the financial analysis provided insights into the company's financial health.
Financial statement analysis involves analyzing a company's financial statements to assess its performance and financial position. It is used to evaluate factors like profitability, solvency, liquidity, and efficiency. Key tools for financial statement analysis include financial ratios, common size analysis, trend analysis, and comparisons to industry standards and past performance. The purpose is to provide useful information to decision makers about a company's historical performance, current condition, and future prospects.
Chapter 1 - Overview of Financial Statement Analysis
Solution Manual Wild
Financial Statement Analysis -
f i n a n c i a l
s tat e m e n t
a n a l y s i s
TENTH EDITION
K. R.
SUBRAMANYAM
JOHN J. WILD
This document discusses some of the challenges involved in analyzing financial statements from companies operating in different countries. It notes that accounting methods, tax laws, financial systems, and terminology can vary significantly between countries due to differences in social, legal, and accounting policies. To accurately compare companies, one must understand these differences and how they can impact reported values. The document also discusses some international financial reporting standards and challenges analysts face in forecasting earnings per share for foreign companies.
Financial statement analysis by BIJAY KUMAR SHAWbijaykumarshaw
This document discusses financial statement analysis. It defines financial statements as presenting a periodic view of a company's financial progress and status. Financial statements are used by shareholders, creditors, stock exchanges, bankers, management, investors, and governments. Financial statement analysis studies the relationships between financial factors disclosed in statements and trends over time. It can be done externally by outsiders without company access or internally by management. The objectives are to understand the company, identify strengths and weaknesses, check fund movements, measure efficiency, and assess growth potential for comparison. Limitations include relying on user intentions, ignoring qualitative factors, and only using historical data. Common techniques discussed are comparative statements, common size statements, and trend analysis.
This document discusses the statement of cash flows and cash flow analysis. It begins by explaining the relevance of cash flows and the statement of cash flows. The statement of cash flows reports cash receipts and payments categorized by operating, investing, and financing activities. It can be constructed using either the direct or indirect method. The indirect method adjusts net income for non-cash items to determine cash flows from operations. Cash flow analysis helps assess a company's liquidity, solvency, and financial flexibility. Ratios like the cash flow adequacy ratio and cash reinvestment ratio can provide additional insights.
This document provides an overview of financial statement analysis. It discusses evaluating business prospects and risks through credit analysis, equity analysis, accounting analysis, and financial analysis. These analyses examine a company's liquidity, solvency, profitability, and cash flows. Ratio analysis and valuation methods are also covered. The purpose is to evaluate a company's performance and financial position over time using its financial statements and additional information.
Prepared by: Group 1
Leader:
Bau, Ella Mae G.
Members:
Adem, Angelie Lyka L.
Amper, Catherine Mae S.
Atienza, Trisha Lane M.
Babela, Ma. Ella V.
Bagang, Aleli M.
Bartolome, Kristine Joy G.
Bayani, Emanuel M.
Cabrera, Kathleen Anne A.
This document analyzes the financial statements of Reliance Industries Ltd over 10 years using various ratio analysis techniques. It calculates ratios such as the current ratio, quick ratio, debt-to-total assets ratio, trade receivables to revenue ratio, gross profit margin, and net profit margin to evaluate the company's performance and financial position over time. The analysis finds that the current ratio, quick ratio and profit margins have generally increased from year 1 to year 10, while debt levels have decreased, indicating an improvement in liquidity and profitability.
The document discusses the analysis of financial statements. It covers key topics such as the nature and essential qualities of financial statements, tools for analysis including comparative statements, common size statements, trend analysis and ratio analysis. It also discusses the interpretation of analysis and interested parties in analyzing financial statements such as management, investors, banks and others. Common financial ratios are outlined including liquidity, activity, profitability, leverage and coverage ratios.
This document discusses the analysis of financial statements. It covers the meaning and nature of financial statements, their essential qualities and limitations. It also discusses various tools and techniques used for financial statement analysis, including comparative statements, common size statements, trend analysis, ratio analysis, and cash flow statements. The document provides examples of different types of ratios and how they can be used by various stakeholders like management, investors, creditors for analysis.
This document discusses financial statement analysis. It identifies the key financial statements that are analyzed - the balance sheet, income statement, and retained earnings statement. It explains the need for comparative analysis using tools like horizontal analysis, vertical analysis, and ratio analysis to evaluate a company's liquidity, profitability, and solvency. Several examples are provided to demonstrate how to compute ratios for liquidity, profitability, and solvency using information from a company's financial statements.
This document provides an introduction to financial statement analysis. It discusses the key types of financial statements, including the income statement, balance sheet, statement of changes in owner's equity, and statement of changes in financial position. It also outlines different classifications and techniques for analyzing financial statements, such as external vs internal analysis, horizontal vs vertical analysis, comparative statement analysis, trend analysis, common size analysis, funds flow analysis, cash flow analysis, and ratio analysis. The overall purpose is to introduce the reader to how financial statements are constructed and various methods for evaluating the financial and operational performance of a business based on its financial reporting.
This document provides an introduction and overview of financial statement analysis for a travel company called Skylite Tours and Travels. The objectives are to assess past performance, analyze financial statements, understand liquidity, solvency, and profitability. The analysis includes calculating working capital, ratio analysis of current ratio, turnover ratios, and return on capital employed. Trend analysis is also performed on expenses, income, assets, and liabilities over three years. Key findings are that the company has good working capital and ratios. Suggestions include improving cash management and working capital.
Financial analysis involves evaluating financial and other information to make decisions. It follows a six-step process: identify the purpose, analyze the company overview and industry, perform financial analysis techniques, conduct detailed accounting analysis, do a comprehensive analysis, and make a decision. Industry analysis considers competition, barriers, suppliers/buyers power, and business cycles. Business strategy focuses on cost leadership, product differentiation, and core competencies. Quantitative financial analysis systematically examines key financial elements using tools like ratios and cash flow analysis. The goals of financial reporting are to capture a company's business reality and reduce management discretion to provide useful information to investors.
The presentation discusses the importance of financial statement analysis for business survival by analyzing profitability and solvency. It covers the purpose of financial analysis, tools such as ratio analysis and comparative statements, and limitations of only considering financial data without qualitative factors. The document provides examples of various ratios to measure profitability, liquidity, asset management, financial structure, and market performance.
The document outlines key aspects of a course on financial statement analysis, including:
- The course will cover the nature, purpose, and methods of financial statement analysis as well as ratio analysis and its importance.
- Students will learn about the objectives, users, and limitations of financial statement analysis to better evaluate the financial position and performance of companies.
- The course will help students understand various liquidity, profitability, and debt ratios and be able to classify accounting ratios to assess companies' financial health for decision making.
This document summarizes key points from Chapter 11 on equity analysis and valuation. It discusses recasting financial statements to separate recurring from non-recurring earnings components. Earnings persistence, determinants of persistence, and their relevance for forecasting are analyzed. Earnings-based valuation is described, emphasizing the use of earnings and accounting measures to compute company value. The importance of analyzing earning power and forecasting earnings for valuation purposes is also explained. Several tools for equity analysis and techniques for recasting, adjusting, and forecasting earnings are outlined.
This document discusses various types and purposes of financial statement analysis. It describes external analysis conducted by outsiders without access to internal records, and internal analysis by executives with access to internal records. Horizontal analysis compares financial data over several years, while vertical analysis examines the relationship between items in one year's statements. The objectives of financial statement analysis are to understand a firm's profitability and financial position. Ratio analysis is identified as the most common analysis technique.
The document analyzes the business and financial performance of Panasonic and Sony over the period of 2008 to 2011. It includes sections on information gathering, accounting techniques used, and an analysis of the companies' financial performance based on ratios calculated from income statements, balance sheets, and cash flow statements. Key metrics examined include profitability, asset utilization, working capital, debt levels, and changes in owners' equity. The analysis provides a comparison of the financial positions and performance trends of the two electronics companies over the three-year period.
There are three types of financial statement comparisons: intra-company, inter-company, and industry averages. Three tools are used for analysis: horizontal analysis examines trends over time, vertical analysis expresses items as a percent of a base amount, and ratio analysis includes liquidity, solvency, turnover, profitability, and market value ratios. Ratios are calculated to measure different aspects of a company's financial health and are used by creditors, stockholders, and others to evaluate performance.
Financial Analysis of Oswal Woollen Mills Ltd.ishbagga
This document summarizes a study on the financial analysis of Oswal Woollen Mills Ltd. It includes an introduction to the textile industry and company. The objectives are to analyze the company's financial position and performance. Financial statements over 5 years are analyzed using ratios to measure liquidity, asset management, debt management, profitability, and cash flows. Key findings indicate the company finances fixed and current assets from long term sources, improving liquidity. In conclusion, the financial analysis provided insights into the company's financial health.
Financial statement analysis involves analyzing a company's financial statements to assess its performance and financial position. It is used to evaluate factors like profitability, solvency, liquidity, and efficiency. Key tools for financial statement analysis include financial ratios, common size analysis, trend analysis, and comparisons to industry standards and past performance. The purpose is to provide useful information to decision makers about a company's historical performance, current condition, and future prospects.
Chapter 1 - Overview of Financial Statement Analysis
Solution Manual Wild
Financial Statement Analysis -
f i n a n c i a l
s tat e m e n t
a n a l y s i s
TENTH EDITION
K. R.
SUBRAMANYAM
JOHN J. WILD
This document discusses some of the challenges involved in analyzing financial statements from companies operating in different countries. It notes that accounting methods, tax laws, financial systems, and terminology can vary significantly between countries due to differences in social, legal, and accounting policies. To accurately compare companies, one must understand these differences and how they can impact reported values. The document also discusses some international financial reporting standards and challenges analysts face in forecasting earnings per share for foreign companies.
Financial statement analysis by BIJAY KUMAR SHAWbijaykumarshaw
This document discusses financial statement analysis. It defines financial statements as presenting a periodic view of a company's financial progress and status. Financial statements are used by shareholders, creditors, stock exchanges, bankers, management, investors, and governments. Financial statement analysis studies the relationships between financial factors disclosed in statements and trends over time. It can be done externally by outsiders without company access or internally by management. The objectives are to understand the company, identify strengths and weaknesses, check fund movements, measure efficiency, and assess growth potential for comparison. Limitations include relying on user intentions, ignoring qualitative factors, and only using historical data. Common techniques discussed are comparative statements, common size statements, and trend analysis.
This document discusses the statement of cash flows and cash flow analysis. It begins by explaining the relevance of cash flows and the statement of cash flows. The statement of cash flows reports cash receipts and payments categorized by operating, investing, and financing activities. It can be constructed using either the direct or indirect method. The indirect method adjusts net income for non-cash items to determine cash flows from operations. Cash flow analysis helps assess a company's liquidity, solvency, and financial flexibility. Ratios like the cash flow adequacy ratio and cash reinvestment ratio can provide additional insights.
This document provides an overview of financial statement analysis. It discusses evaluating business prospects and risks through credit analysis, equity analysis, accounting analysis, and financial analysis. These analyses examine a company's liquidity, solvency, profitability, and cash flows. Ratio analysis and valuation methods are also covered. The purpose is to evaluate a company's performance and financial position over time using its financial statements and additional information.
Prepared by: Group 1
Leader:
Bau, Ella Mae G.
Members:
Adem, Angelie Lyka L.
Amper, Catherine Mae S.
Atienza, Trisha Lane M.
Babela, Ma. Ella V.
Bagang, Aleli M.
Bartolome, Kristine Joy G.
Bayani, Emanuel M.
Cabrera, Kathleen Anne A.
This document analyzes the financial statements of Reliance Industries Ltd over 10 years using various ratio analysis techniques. It calculates ratios such as the current ratio, quick ratio, debt-to-total assets ratio, trade receivables to revenue ratio, gross profit margin, and net profit margin to evaluate the company's performance and financial position over time. The analysis finds that the current ratio, quick ratio and profit margins have generally increased from year 1 to year 10, while debt levels have decreased, indicating an improvement in liquidity and profitability.
The document discusses the analysis of financial statements. It covers key topics such as the nature and essential qualities of financial statements, tools for analysis including comparative statements, common size statements, trend analysis and ratio analysis. It also discusses the interpretation of analysis and interested parties in analyzing financial statements such as management, investors, banks and others. Common financial ratios are outlined including liquidity, activity, profitability, leverage and coverage ratios.
This document discusses the analysis of financial statements. It covers the meaning and nature of financial statements, their essential qualities and limitations. It also discusses various tools and techniques used for financial statement analysis, including comparative statements, common size statements, trend analysis, ratio analysis, and cash flow statements. The document provides examples of different types of ratios and how they can be used by various stakeholders like management, investors, creditors for analysis.
This document discusses the analysis of financial statements through various tools and techniques. It begins by defining financial statement analysis and outlining its purpose. It then explains key tools for analysis like comparative statements, common size statements, trend analysis, and ratio analysis. Various types of ratios are classified like liquidity, leverage, activity, and profitability ratios. The document also discusses the interpretation of analysis and interested parties that use financial statement analysis.
Financial statement analysis involves calculating ratios to evaluate a company's profitability, liquidity, asset use, financial stability, and market performance over time. It is more than just analyzing numbers - it requires understanding a company's industry, strategy, annual reports, economic conditions and more. For the Quorum Group, the investor should calculate relevant ratios such as profit margins, asset turnover, debt-to-equity, and compare trends over time to evaluate the company's financial performance and position for investment purposes.
This document outlines key concepts for analyzing financial statements. It discusses three perspectives to view statements from (stockholders, managers, creditors), how to prepare and use common-size statements and financial ratios to evaluate performance, and the DuPont system for linking the income statement and balance sheet using return on equity. Benchmarks are described as important references for interpreting ratio analysis results. Limitations include analysis not being exact and relying on historical accounting data.
This document discusses financial statements and their analysis. It defines key financial statements like the income statement, balance sheet, statement of retained earnings, and statement of cash flows. It also describes different types of financial statement analysis, including horizontal analysis, vertical analysis, common size statements, ratio analysis, trend analysis, and fund and cash flow analysis. The purpose of financial statement analysis is to evaluate a company's performance and financial position over time and in comparison to other companies.
Bba 2204 fin mgt week 3 financial ratiosStephen Ong
This document provides an overview of financial statements and ratio analysis. It discusses the key financial statements including the income statement, balance sheet, statement of retained earnings, and statement of cash flows. It also covers consolidating international financial statements and how various parties use ratio analysis to evaluate a firm's liquidity, activity, debt, and profitability by comparing financial metrics to industry averages and past performance. Specific examples are provided to demonstrate calculating common ratios like the current ratio, inventory turnover, times interest earned, and gross profit margin for a sample company. The document is intended to help readers understand how to use ratio analysis to evaluate a firm's financial health.
The document discusses international financial statement analysis and the need to analyze non-domestic financial statements due to increasing globalization and cross-border business activities. It covers the importance of understanding different countries' business environments and financial reporting standards when performing international financial analysis. The document also provides an overview of the key components of financial statement analysis, including business strategy analysis, accounting analysis, ratio analysis, and audit reports. It discusses the role of auditors in providing an independent assessment of financial statement reliability across different country reporting requirements.
The document provides an overview of financial statement analysis, including:
1. It outlines the framework for analyzing financial statements, which involves assessing the business environment, reading financial statements and footnotes, evaluating earnings quality, and predicting future profits or cash flows.
2. Financial statement analysis is used to assess a company's financial condition and performance, strengths and weaknesses.
3. Various types of business analysis are described, including credit analysis, equity analysis, and prospective analysis to estimate a company's intrinsic value.
This document presents an internship report analyzing the financial statements of Al Amin Refrigeration & Engineering Works over five years. The objectives are to analyze the company's financial performance and position, trends over five years, and provide recommendations. Key financial ratios are calculated from the balance sheet and income statement such as current ratio, net working capital, cost income ratio, and return on equity. Findings and recommendations are provided based on the ratio and trend analysis. In conclusion, Al Amin Refrigeration has set new standards in the industry during economic turbulence and converted to a public company as part of long term financial reforms.
The document discusses various techniques for financial statement analysis including common-size analysis, ratio analysis, and DuPont analysis. It provides details on calculating and interpreting different types of activity ratios such as inventory turnover, receivables turnover, and payables turnover. Specific ratios are calculated and compared for Meghna Cement and Confidence Cement to analyze inventory management and receivables collection efficiency between the two cement companies.
This document provides an overview of key accounting concepts for managers, including how to prepare and analyze financial statements. It discusses how to prepare an income statement and balance sheet, what an annual report contains, and how to perform financial statement analysis through ratio analysis and common size statements. The income statement summarizes a company's revenues, expenses and profits over time. A balance sheet provides a snapshot of a company's assets, liabilities and shareholder equity at a point in time. Ratio analysis and common size statements allow comparison of financial metrics across time periods and companies.
Financial statement analysis is a technique used to analyze and extract useful information from a company's financial statements to evaluate its performance, financial position, and future prospects. It involves calculating and examining various financial metrics and ratios, comparing the company's performance over time and against industry benchmarks and competitors. The goal is to assess the company's profitability, liquidity, operational efficiency, and financial risk in order to make informed decisions. Common tools used include ratio analysis, comparative statement analysis, and trend analysis. While useful, financial statement analysis has some limitations and should not be relied on exclusively to predict a company's future.
The document summarizes financial statement analysis. It discusses the objectives of financial statements which are to provide information for economic decisions, about financial position, performance, and changes in financial position. It then defines financial statement analysis as studying relationships among factors disclosed in statements. Analysis allows evaluation of a firm's position and performance. Objectives of analysis include judging financial health, profitability, debt capacity, and solvency. Types of analysis include external, internal, horizontal, and vertical. Methods include common size statements, comparative statements, trend ratios, and ratio, funds flow, cash flow, break-even, and value added analysis.
This document discusses various types of financial statement analytics used in accounting. Descriptive analytics include ratio analysis to evaluate relationships between financial items and assess a company's performance. Vertical analysis shows financial statement items as a percentage of a base figure. Horizontal analysis compares historical financial data year-over-year. Diagnostic analytics use benchmarks to provide context for a company's performance relative to competitors. Predictive analytics aim to forecast future performance. XBRL facilitates computer-readable financial reporting and supports timely financial analysis.
The document provides an overview of financial analysis and planning. It discusses key financial statements like the balance sheet, income statement, and cash flow statement as sources of financial information. It also covers various types of financial ratios used in analysis, including liquidity, activity, leverage, profitability, and market value ratios. Specific ratios discussed include the current ratio, quick ratio, inventory turnover, accounts receivable turnover, and average payment period. The document emphasizes the importance of financial analysis for decision making and evaluating a firm's financial health.
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University of North Carolina at Charlotte degree offer diploma Transcripttscdzuip
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"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
Dr. Alyce Su Cover Story - China's Investment Leadermsthrill
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...AntoniaOwensDetwiler
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
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Discover essential details about Thailand's recent visa policy changes, tailored for tourists and students. Amit Kakkar Easy Visa provides a comprehensive overview of new requirements, application processes, and tips to ensure a smooth transition for all travelers.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
Enhancing Asset Quality: Strategies for Financial Institutionsshruti1menon2
Ensuring robust asset quality is not just a mere aspect but a critical cornerstone for the stability and success of financial institutions worldwide. It serves as the bedrock upon which profitability is built and investor confidence is sustained. Therefore, in this presentation, we delve into a comprehensive exploration of strategies that can aid financial institutions in achieving and maintaining superior asset quality.
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2. SYNOPSISSYNOPSIS
• 1)1) MEANING OF FINANCIAL STATEMENTMEANING OF FINANCIAL STATEMENT
• 2)2) NATURE OF FINANCIAL STATEMENTNATURE OF FINANCIAL STATEMENT
• 3)3) ESSENTIAL QUALITIES OF FINANCIALESSENTIAL QUALITIES OF FINANCIAL
STATEMENTSTATEMENT
• 4)4) LIMITATION OF FINANCIALLIMITATION OF FINANCIAL
STATEMENTSTATEMENT
• 5)5) FINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSIS
• 6)6) TOOLS & TECHNIQUES OF ANALYSISTOOLS & TECHNIQUES OF ANALYSIS
• 7)7) TYPES OF COMPARISONTYPES OF COMPARISON
• 8)8) INTERPRETATIONINTERPRETATION
3. NATURE OF FINANCIALNATURE OF FINANCIAL
STATEMENTSTATEMENT
• The data exhibited by financial statementsThe data exhibited by financial statements
are affected byare affected by
• a)a) Recorded factsRecorded facts
• b)b) Accounting Concepts,Accounting Concepts,
Conventions & PrinciplesConventions & Principles
• c)c) Personal JudgmentPersonal Judgment
6. LIMITATIONS OF FINANCIALLIMITATIONS OF FINANCIAL
STATEMENTSSTATEMENTS
• 1.1. Lack of PrecisionLack of Precision
• 2.2. Lack of ExactnessLack of Exactness
• 3.3. Incomplete InformationIncomplete Information
• 4.4. Interim ReportsInterim Reports
• 5.5. Hiding of Real Position or Window DressingHiding of Real Position or Window Dressing
• 6.6. Lack of ComparabilityLack of Comparability
• 7.7. Historical CostsHistorical Costs
7. AnalysisAnalysis
• Analysis – To Analyse – to cut into piecesAnalysis – To Analyse – to cut into pieces
• But only analyse – No – It means alsoBut only analyse – No – It means also
Interpretation.Interpretation.
• ThusThus
• Financial Statement Analysis meansFinancial Statement Analysis means
“Analysis, comparisons and“Analysis, comparisons and
interpretation of Financial data tointerpretation of Financial data to
achieve the desired result”achieve the desired result”
8. TOOLS OF FINANCIALTOOLS OF FINANCIAL
STATEMENT ANALYSISSTATEMENT ANALYSIS
• 1.1. Comparative StatementsComparative Statements
• 2.2. Common Size StatementsCommon Size Statements
• 3.3. Trend AnalysisTrend Analysis
• 4.4. Ratio AnalysisRatio Analysis
• 5.5. Fund Flow StatementFund Flow Statement
• 6.6. Cash Flow StatementCash Flow Statement
9. Types of FinancialTypes of Financial
AnalysisAnalysis
• 1.1. Intra-Firm ComparisonIntra-Firm Comparison
• 2.2. Inter-firm ComparisonInter-firm Comparison
• 3.3. Industry Average or StandardIndustry Average or Standard
AnalysisAnalysis::
• 4.4. Horizontal AnalysisHorizontal Analysis
• 5.5. Vertical AnalysisVertical Analysis
10. InterpretationInterpretation
• The Analysis is of no use without interpretationThe Analysis is of no use without interpretation
The Company has to interpret the financialThe Company has to interpret the financial
statement which it has analysed.statement which it has analysed.
• The Analysis is made to serve the followingThe Analysis is made to serve the following
purposepurpose
•
• 1.1. Profitability AnalysisProfitability Analysis
• 2.2. Liquidity AnalysisLiquidity Analysis
• 3.3. Solvency Analysis (To know the financial structure)Solvency Analysis (To know the financial structure)
11. Interested Parties in Analysis ofInterested Parties in Analysis of
Financial StatementsFinancial Statements
• 1.1. ManagementManagement
• 2.2. Investors (In the form of Shareholders orInvestors (In the form of Shareholders or
• Debentureholders)Debentureholders)
• 3.3. Banks and Financial InstitutionBanks and Financial Institution
• 4.4. Trade CreditorsTrade Creditors
• 5.5. Government and their AgenciesGovernment and their Agencies
• 6.6. EmployeesEmployees
• 7.7. CustomersCustomers
• 8.8. PublicPublic
• 9.9. Trade AssociationTrade Association
• 10.10. Stock ExchangeStock Exchange
12. 1. Comparative Financial1. Comparative Financial
StatementsStatements
• Comparative Financial Statements is aComparative Financial Statements is a
statement of Financial Position of astatement of Financial Position of a
business designed in such a way where abusiness designed in such a way where a
comparative study is undertaken ofcomparative study is undertaken of
different accounting items, to measure thedifferent accounting items, to measure the
performance of a Business Activity.performance of a Business Activity.
13. Types of ComparisonTypes of Comparison
• There are 3 types of ComparisonThere are 3 types of Comparison
• 1)1) Inter Firm ComparisonInter Firm Comparison
• 2)2) Intra Firm ComparisonIntra Firm Comparison
• 3)3) Inter Period ComparisonInter Period Comparison
14. Merits:Merits:
• 1)1) Indicate the Direction ofIndicate the Direction of
FinancialFinancial
PositionPosition
• 2)2) Reveal Nature & Trend:Reveal Nature & Trend:
• 3)3) Identifying Trouble Spots:Identifying Trouble Spots:
•
15. Disadvantages:Disadvantages:
• 1)1) Misleading picture, if consistency in accounting principleMisleading picture, if consistency in accounting principle
not followed.not followed.
• 2)2) Constant change in price level tender accountingConstant change in price level tender accounting
statement useless for comparison.statement useless for comparison.
• 3)3) Inter firm comparison is useless, unless all the firms areInter firm comparison is useless, unless all the firms are
of the same age, size and follow the same principles.of the same age, size and follow the same principles.
• 4)4) If there exists any Abnormal Period between 2 successiveIf there exists any Abnormal Period between 2 successive
accounting period then it will prove to be a pointless analysis.accounting period then it will prove to be a pointless analysis.
16. 2. Common Size2. Common Size
StatementsStatements
• It is a Statement in Vertical Form in whichIt is a Statement in Vertical Form in which
every item of the Financial Statement isevery item of the Financial Statement is
reduced to a common base. This wasreduced to a common base. This was
introduced with a view to overcome theintroduced with a view to overcome the
limitation of Comparative Statement.limitation of Comparative Statement.
17. Types of common sizeTypes of common size
statements.statements.
• (1)Common Size Balance Sheet(1)Common Size Balance Sheet
• ((2)Common Size Income Statement:2)Common Size Income Statement:
18. Advantages of Common SizeAdvantages of Common Size
StatementStatement
• 1)1) It reveals Sources and Application of FundsIt reveals Sources and Application of Funds
in a nutshell which help in taking decision.in a nutshell which help in taking decision.
• (2)(2) If common size statements of 2 or moreIf common size statements of 2 or more
years are compared it indicate the changingyears are compared it indicate the changing
proportion of various components of Assets,proportion of various components of Assets,
Liabilities, Cost, Net Sale & Profit.Liabilities, Cost, Net Sale & Profit.
• (3)(3) When Inter Firm Comparison is made withWhen Inter Firm Comparison is made with
the help of Common size statement it helps inthe help of Common size statement it helps in
doing corporate evaluation and Ranking.doing corporate evaluation and Ranking.
19. Disadvantages of CommonDisadvantages of Common
Size StatementSize Statement
• (1)(1) No Established Standard Proportion:No Established Standard Proportion:
• Common Size Statements are regarded as useless asCommon Size Statements are regarded as useless as
there is no established standard proportion of an asset tothere is no established standard proportion of an asset to
the total asset or an item of expense to the net sales.the total asset or an item of expense to the net sales.
• (2)(2) Consistency Required:-Consistency Required:-
• If Financial Statement of a Particular businessIf Financial Statement of a Particular business
organization are not prepared year after year on aorganization are not prepared year after year on a
consistent basis comparative study of common sizeconsistent basis comparative study of common size
statement will be misleadingstatement will be misleading
20. 3. Trend Analysis3. Trend Analysis
• Trend Analysis is a statement in verticalTrend Analysis is a statement in vertical
form where the earliest year is taken asform where the earliest year is taken as
base year and the value of all the items inbase year and the value of all the items in
the financial statements will be related tothe financial statements will be related to
the base year in terms of % where valuethe base year in terms of % where value
of each item in base year will beof each item in base year will be
considered as 100. Trend % analysisconsidered as 100. Trend % analysis
move in one directions either upward ormove in one directions either upward or
downward progression or regression.downward progression or regression.
21. Advantages:Advantages:
• (1)(1) Trend % indicate the increase or decreaseTrend % indicate the increase or decrease
with the magnitude of change in % which iswith the magnitude of change in % which is
more effective than absolute data.more effective than absolute data.
• Ex. If we say profit increases by Rs. 50,000/- itEx. If we say profit increases by Rs. 50,000/- it
will be meaningless unless we find by what %will be meaningless unless we find by what %
the profit has increased.the profit has increased.
• (2)(2) Facilitate efficient comparative study ofFacilitate efficient comparative study of
financial performancefinancial performance
22. Limitations:Limitations:
• (1)(1) It will give a misleading picture if consistency inIt will give a misleading picture if consistency in
accounting principle is not followed.accounting principle is not followed.
• (2)(2) Constant change in price level render accountingConstant change in price level render accounting
statement useless for comparison.statement useless for comparison.
• (3)(3) During inflationary period the data over a period of timeDuring inflationary period the data over a period of time
become incomparable, unless the absolute rupee data isbecome incomparable, unless the absolute rupee data is
adjusted.adjusted.
• (4)(4) There is always the danger of selecting the base yearThere is always the danger of selecting the base year
which may not be representative, normal & typical.which may not be representative, normal & typical.
• (5)(5) Trend % should be studied in relation with AbsoluteTrend % should be studied in relation with Absolute
figure otherwise it give misleading picture. For ex. No. offigure otherwise it give misleading picture. For ex. No. of
student where 2, the next year they increased to 4. Now trendstudent where 2, the next year they increased to 4. Now trend
% show 100% increase but absolutely we get clear picture% show 100% increase but absolutely we get clear picture
than trend %.than trend %.
23. 4. Ratio Analysis4. Ratio Analysis
• TRADITIONAL CLASSIFICATIONTRADITIONAL CLASSIFICATION
• BALANCE SHEET RATIOSBALANCE SHEET RATIOS
• (1)(1) Current RatioCurrent Ratio
• (2)(2) Quick Ratio / Liquid Ratio / Acid Test Ratio.Quick Ratio / Liquid Ratio / Acid Test Ratio.
• (3)(3) Super Quick RatioSuper Quick Ratio
• (4)(4) Stock to work Capital RatioStock to work Capital Ratio
(5)(5) Capital Gearing RatioCapital Gearing Ratio
• (6)(6) Debt Equity RatioDebt Equity Ratio
• (7)(7) Proprietary RatioProprietary Ratio
• (8)(8) Long Term Borrowing : Total AssetLong Term Borrowing : Total Asset
• (9)(9) Fixed Assets : Net Worth.Fixed Assets : Net Worth.
24. REVENUE STATEMENTREVENUE STATEMENT
RATIOSRATIOS
• Gross Profit RatioGross Profit Ratio
• Net Profit RatioNet Profit Ratio
• Operating Net Profit RatioOperating Net Profit Ratio
• Operating RatioOperating Ratio
• Operating Expenses RatioOperating Expenses Ratio
• Stock Turnover RatioStock Turnover Ratio
• Stock Holding PeriodStock Holding Period
25. COMBINED RATIOSCOMBINED RATIOS
• Return on Investment (ROI) orReturn on Investment (ROI) or
Return on Capital Employed (ROCE)Return on Capital Employed (ROCE)
• Return on Proprietor / Shareholder fundReturn on Proprietor / Shareholder fund
• Return on Equity shareholder fundReturn on Equity shareholder fund
• Earning per shareEarning per share
• Dividend per shareDividend per share
• Dividend Payout RatioDividend Payout Ratio
• Price Earning RatioPrice Earning Ratio
• Interest Coverage RatioInterest Coverage Ratio
26. COMBINED RATIOSCOMBINED RATIOS
• Debt : Service Coverage RatioDebt : Service Coverage Ratio
• Debit Collection periodDebit Collection period
• Debtor Turnover RatioDebtor Turnover Ratio
• Creditor Payment PeriodCreditor Payment Period
• Creditor Turnover RatioCreditor Turnover Ratio
• Preference Dividend CoverPreference Dividend Cover
• Equity Dividend CoverEquity Dividend Cover
27. BASED ON FUNCTIONSBASED ON FUNCTIONS
• SOLVENCY RATIOSSOLVENCY RATIOS
• Short Term SolvencyShort Term Solvency
• Current RatioCurrent Ratio
• Quick Ratio / Liquid Ratio / Acid TestQuick Ratio / Liquid Ratio / Acid Test
RatioRatio
• Super Quick RatioSuper Quick Ratio
• Stock : Working Capital Ratio.Stock : Working Capital Ratio.
28. Long Term Solvency /Long Term Solvency /
Leverage Ratio /Leverage Ratio /
• Capital GearingCapital Gearing
• Debt : Equity RatioDebt : Equity Ratio
• Proprietary RatioProprietary Ratio
• Long Term Borrowing: Total AssetsLong Term Borrowing: Total Assets
• ( 1 – Net Worth )/ Total( 1 – Net Worth )/ Total
AssetsAssets
• Fixed Asset : Net worthFixed Asset : Net worth
29. ACTIVITY RATIO /ACTIVITY RATIO /
TURNOVER RATIOSTURNOVER RATIOS
• Stock Turn Over RatioStock Turn Over Ratio
Stock Holding PeriodStock Holding Period
Debt Collection PeriodDebt Collection Period
Debtor Turnover RatioDebtor Turnover Ratio
Creditor Payment PeriodCreditor Payment Period
Creditor Turnover RatioCreditor Turnover Ratio
30. PROFITABILITY RATIOPROFITABILITY RATIO
• In relation to salesIn relation to sales
• Gross Profit RatioGross Profit Ratio
• Net Profit RatioNet Profit Ratio
• Operating Net Profit RatioOperating Net Profit Ratio
• Operating RatioOperating Ratio
• Operating Expenses Ratio.Operating Expenses Ratio.
31. In relation to capitalIn relation to capital
employedemployed
• Return on Interest (ROI) or Return on CapitalReturn on Interest (ROI) or Return on Capital
Employed (ROLE)Employed (ROLE)
• Return on Proprietor / Shareholder fundsReturn on Proprietor / Shareholder funds
• Return on Equity Shareholder FundReturn on Equity Shareholder Fund
• Earning per ShareEarning per Share
• Dividend per ShareDividend per Share
• Dividend Payout RatioDividend Payout Ratio
• Price Earning RatioPrice Earning Ratio
32. COVERAGE RATIOSCOVERAGE RATIOS
• Interest Coverage RatioInterest Coverage Ratio
• Preference Dividend CoverPreference Dividend Cover
• Equity Dividend CoverEquity Dividend Cover
• Debt Service Coverage RatioDebt Service Coverage Ratio
•
33. USER BASEDUSER BASED
CLASSIFICATIONCLASSIFICATION
• FOR SHORT TERM CREDITORSFOR SHORT TERM CREDITORS
• (1)(1) Current RatioCurrent Ratio
• (2)(2) Quick / Liquid Ratio / Acid Test RatioQuick / Liquid Ratio / Acid Test Ratio
• (3)(3) Super Quick RatioSuper Quick Ratio
• (4)(4) Stock : Working Capital RatioStock : Working Capital Ratio
• (5)(5) Stock Turnover RatioStock Turnover Ratio
• (6)(6) Stock Holding PeriodStock Holding Period
• (7)(7) Creditor Payment PeriodCreditor Payment Period
(8)(8) Creditor Turnover RatioCreditor Turnover Ratio
34. FOR LONG TERMFOR LONG TERM
CREDITORSCREDITORS
• Capital Gearing RatioCapital Gearing Ratio
• Debit : Equity RatioDebit : Equity Ratio
• Proprietary RatioProprietary Ratio
• Long Term Borrowing : Total Asset RatioLong Term Borrowing : Total Asset Ratio
• Fixed Asset : Net worthFixed Asset : Net worth
• Interest Coverage RatioInterest Coverage Ratio
• Debt Service Coverage RatioDebt Service Coverage Ratio
35. FOR SHARE HOLDERSFOR SHARE HOLDERS
• Return on Investment (ROI) or Return on CapitalReturn on Investment (ROI) or Return on Capital
Employed (ROCE)Employed (ROCE)
• Return on Proprietary / Shareholder fundReturn on Proprietary / Shareholder fund
• Return on Equity Shareholder fundReturn on Equity Shareholder fund
• Earning per shareEarning per share
• Dividend per shareDividend per share
• Dividend payout RatioDividend payout Ratio
• Price Earning RatioPrice Earning Ratio
• Preference Dividend CoverPreference Dividend Cover
• Equity Dividend CoverEquity Dividend Cover
36. FOR MANAGEMENTFOR MANAGEMENT
• Return on Investment (ROI) or Return onReturn on Investment (ROI) or Return on
Capital Employed (ROCE)Capital Employed (ROCE)
• Debtor Turnover RatioDebtor Turnover Ratio
• Debtor Collection PeriodDebtor Collection Period
• Creditor Payment periodCreditor Payment period
• Creditor Turnover RatioCreditor Turnover Ratio
• Stock Turnover RatioStock Turnover Ratio
• Stock Holding PeriodStock Holding Period
37. FOR MANAGEMENTFOR MANAGEMENT
• Gross Profit RatioGross Profit Ratio
• Net Profit RatioNet Profit Ratio
• Operating Net Profit RatioOperating Net Profit Ratio
• Operating RatioOperating Ratio
• Proprietary RatioProprietary Ratio
• Fixed Asset : Net WorthFixed Asset : Net Worth
• Long Term Borrowing : Total AssetsLong Term Borrowing : Total Assets