the basic principle of financial statement analysis. purpose's analysis, method of financial statement analysis, and technic of financial statement analysis
This Power point presentation contents all about management accounting,
- Meaning of Management Accounting
-Scope of Management Accounting,
-Objectives of Management Accounting,
-Tools & Techniques for Management Accounting,
-Advantages of Management Accounting,
-Limitations of Management Accounting,
-Difference Between Management Accounting,Cost Accounting & Financial Accounting.
This Power point presentation contents all about management accounting,
- Meaning of Management Accounting
-Scope of Management Accounting,
-Objectives of Management Accounting,
-Tools & Techniques for Management Accounting,
-Advantages of Management Accounting,
-Limitations of Management Accounting,
-Difference Between Management Accounting,Cost Accounting & Financial Accounting.
DuPont analysis is a useful technique to break down the different return on equity (ROE) generators. The ROE decomposition helps investors to concentrate separately on key indicators of financial success to define strengths and weaknesses.
Three main financial metrics drive equity return (ROE): operating performance, asset usage performance, and financial leverage. Operating output is a net profit margin or a net income separated by overall revenue or profits.
The efficiency of asset usage is determined by the turnover ratio of the assets. Leverage is calculated by the equity multiplier, equal to average assets divided by average equities.
The component parts of a firm's return on equity (ROE) are calculated using a DuPont analysis. This allows an investor to assess, which financial activities contribute the most to the ROE changes
here we are trying to explain how firms can benefit from forecasting exchange rate, to describe common technique that used to forecast, how to evaluate forecasting performance
Horizontal analysis is also known as Trend Analysis refers to studying the behavior of individual financial statement items over several accounting periods. The Vertical Analysis concentrates on the relationships between various financial items on a financial statement. Copy the link given below and paste it in new browser window to get more information on Horizontal and Vertical Analysis:- http://www.transtutors.com/homework-help/accounting/horizontal-and-vertical-analysis.aspx
Get a sample on Financial statement analysis explaining how equity investors have the objectives to know the business future earning capacity, growth potential and security of their holdings. All the investors are very much interested to get higher amount of returns. Therefore, they make risk and return analysis associated with their invested funds. Lenders such as bond investors have the objectives to know the short term as well as long term solvency of the business (Bushman and Smith, 2001).
2007 guide book on SPSS / AMOS for my 2nd year students by myself, Dr Lo, and Heriyadi, who have agreed to share this online. A bit outdated now, but can still be used.
DuPont analysis is a useful technique to break down the different return on equity (ROE) generators. The ROE decomposition helps investors to concentrate separately on key indicators of financial success to define strengths and weaknesses.
Three main financial metrics drive equity return (ROE): operating performance, asset usage performance, and financial leverage. Operating output is a net profit margin or a net income separated by overall revenue or profits.
The efficiency of asset usage is determined by the turnover ratio of the assets. Leverage is calculated by the equity multiplier, equal to average assets divided by average equities.
The component parts of a firm's return on equity (ROE) are calculated using a DuPont analysis. This allows an investor to assess, which financial activities contribute the most to the ROE changes
here we are trying to explain how firms can benefit from forecasting exchange rate, to describe common technique that used to forecast, how to evaluate forecasting performance
Horizontal analysis is also known as Trend Analysis refers to studying the behavior of individual financial statement items over several accounting periods. The Vertical Analysis concentrates on the relationships between various financial items on a financial statement. Copy the link given below and paste it in new browser window to get more information on Horizontal and Vertical Analysis:- http://www.transtutors.com/homework-help/accounting/horizontal-and-vertical-analysis.aspx
Get a sample on Financial statement analysis explaining how equity investors have the objectives to know the business future earning capacity, growth potential and security of their holdings. All the investors are very much interested to get higher amount of returns. Therefore, they make risk and return analysis associated with their invested funds. Lenders such as bond investors have the objectives to know the short term as well as long term solvency of the business (Bushman and Smith, 2001).
2007 guide book on SPSS / AMOS for my 2nd year students by myself, Dr Lo, and Heriyadi, who have agreed to share this online. A bit outdated now, but can still be used.
The Financial Accounting slideshare from WE School introduces the subject as not just a science – in the way the data is recorded) but an art too – in the way it is interpreted. Accounting is an information system which measures, processes and communicates financial information to decision makers.
To know more about Welingkar School’s Distance Learning Program and courses offered, visit:
http://www.welingkaronline.org/distance-learning/online-mba.html
This Slideshare is the sole Property of the Welingkar School of Distance Learning – Reproduction of this material , without prior consent, either wholly or partially will be treated as a violation of copyright.
This presentation will help professionals as well as students to understand ratios. I have used very easy language and have tried to be more descriptive.
chapter 8Responsibility Concepts and Sound Decision-Maki.docxchristinemaritza
chapter 8
Responsibility Concepts and Sound
Decision-Making Analytics
Learning Objectives
• Understand concepts in responsibility accounting.
• Be able to provide a framework for rational business decision making, and understand
how to apply these concepts for specific types of situations.
• Apply capital budgeting methods and discounted cash flow concepts.
• Know how to make proper long-term investment decisions.
istockphoto
waL80281_08_c08_189-212.indd 1 9/25/12 1:03 PM
CHAPTER 8Section 8.1 Responsibility Accounting Concepts
Chapter Outline
8.1 Responsibility Accounting Concepts
Accumulation of Information to Match Centers
Management by Exception
Rational Decision Making
Sunk Costs
8.2 A General Framework for Making Sound Business Decisions
Applying the General Framework to an Example: Bulk Orders
Applying the General Framework to an Example: Offshoring
8.3 Capital Expenditures
Future Value
Annuity
Present Value
8.4 Making Decisions About Long-Term Investments
Net Present Value
Internal Rate of Return
Simpler Capital Budgeting Methods
Recap of Using Capital Budgeting Tools for Decision Making
8.1 Responsibility Accounting Concepts
In general, managers should be held accountable for the results of their decisions and business execution. Without accountability based on performance-related feedback, the
business will not perform at its best, and areas in need of improvement may not be iden-
tified on a timely basis. Business feedback is often based on financial results. You have
already seen how budgets and variances are used to help identify areas for improvement.
Because managers are accountable for their decisions, actions, and outcomes, their perfor-
mance measures should align around the department, product, division, or other business
for which they are responsible. In other words, the attribution of responsibility tends to
follow the organizational structure of the business.
Sometimes, a business has a highly dispersed design, with decisions nested with lower
level managers. Other businesses generate decisions only at the upper levels, and
lower level personnel are basically charged with execution of defined actions. Proper
implementation of responsibility accounting concepts stipulates that performance mea-
sures be aligned with the business organization structure. In other words, accountability
should map to responsibility. Proper design of performance measurement systems there-
fore requires that the management accountant carefully consider the organizational struc-
ture. Sometimes performance measures are only appropriate on an aggregated basis, such
as where the organization is structured as a top–down, command-and-control, central-
ized decision-making entity. As lower level managers are given increased authority, so
too should the accountability system be modified to provide more disaggregated perfor-
mance measures. Although quite logical, this presents measurement challenges.
waL80281_ ...
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Ethnobotany in herbal drug evaluation,
Impact of Ethnobotany in traditional medicine,
New development in herbals,
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Welcome to TechSoup New Member Orientation and Q&A (May 2024).pdfTechSoup
In this webinar you will learn how your organization can access TechSoup's wide variety of product discount and donation programs. From hardware to software, we'll give you a tour of the tools available to help your nonprofit with productivity, collaboration, financial management, donor tracking, security, and more.
1. BASIC PRINCIPLE OF FINANCIAL STATEMENT
ANALYSIS
KHOMSATUN (7101413011)
NUR MAIZAH RAHMAWATI (7101413052)
2. Analysis’s purpose
to select, evaluate, interpreting and compare
financial data, along with other pertinent
information, in order to formulate an
assessment of a company’s present and future
financial condition and performance.
3. Method of financial statement analysis
1. Horizontal common-size analysis uses the amounts in
accounts in a specified year as the base, and
subsequent years’ amounts are stated as a percentage
of the base value.
• Useful when comparing growth of different accounts over
time.
2. Vertical common-size analysis uses the aggregate
value in a financial statement for a given year as the
base, and each account’s amount is restated as a
percentage of the aggregate.
• Balance sheet: Aggregate amount is total assets.
• Income statement: Aggregate amount is revenues or sales.
5. 1. LIQUIDITY
• Liquidity is the ability to satisfy the company’s short-term obligations using
assets that can be most readily converted into cash.
6. SOLVENCY
Solvency is a measure of the long-term financial viability of a business which
means its ability to pay off its long-term obligations such as bank loans, bonds
payable, etc
Total Liability
• Total Debt to Equity Ratio = ------------------ x 100 %.
equity
Total liability
• Total Debt to capital Assets = ------------------- x 100 %.
Total Asset
long term liability
• Long Term Debt to = -------------------------------- x 100 %
Equity Ratio equity
7. Profitability
Profitability is the ability of a business to
earn profit for its owners. While liquidity
ratios and solvency ratios are relationships
that explain the financial position of a
business profitability ratios are relationships
that explain the financial performance of a
business. Key profitability ratios include net
profit margin, gross profit margin, operating
profit margin, return on assets, return on
capital, return on equity, etc.
8. Profitability
Gross profit
• Gross Profit Margin = ---------------------- x 100 %.
Net sales
COGS + adm. expenses
• Operating Ratio = --------------------------------- x 100 %.
Net sales
Net profit after tax
• Net Profit Margin = ---------------------------- x 100 %.
Net sales
Net profit after tax
• Return On Investment = ----------------------------- x 100 %.
total assets
9. ACTIVITY RATIO
Activity ratios explain the level of efficiency
of a business. Key activity ratios include
inventory turnover, days sales in inventory,
accounts receivable turnover, days sales in
receivables, etc.
10. net sales
– Total Assets = ------------------------- x 1 kali.
Turn Over Total assets
sales on credit
– Receivable Turnover = -------------------------- x 1 kali.
receivable
receivable average x 360
– Average Collection = ----------------------------- x 1 hari.
Periode sales on credit
11. cost of good sold
Inventory Turnover = ----------------------------- x 1 kali.
Inventory
Inventory x 360
Average day’s = ----------------------------- x 1 hari.
Inventory cost of goods sold
net sales
Working Capital = ------------------------------------- x 1 kali.
Turnover current assets – current liability
12. Technic of financial statement analysis
Comparing of
financial
statement
Trend
Common size
statement
Cash flow
statement
Working capital
analysis
Ratio analysis
Gross profit
analysis
Break even
analysis
13. Financial statement comparing
analysis
Is an analysis method to compare financial
statement for 2 period or over the period that
shown :
a. Absolut data
b. Fluctuating value in rupiah
c. Fluctuating value in precentage
d. Comparing value in ratio
e. Total of precentage
14. Example: Income Statement PT Telkom
Periode
2011
(Rp)
Periode 2012
(Rp)
Berkurang-
Bertambah
(Rp)
Berkurang-
Bertambah (%)
Income 71.253 77.143
Salary Exp 8.555 9.786
Depreciation Exp 14.863 14.456
Adv. Exp 3.278 3.094
Admin Exp 2.935 3.036
Other Exp 192 1.973
Gross profit 41.430 44.798
Income tax 5.387 5.866
Net profit 36.043 38.932
17. TREND PERCENTAGE ANALYSIS
calculates the percentage change for one account
over a period of time of two years or more.
• Percentage change
To calculate the percentage change between two
periods:
• Calculate the amount of the increase/(decrease) for
the period by subtracting the earlier year from the
later year. If the difference is negative, the change is a
decrease and if the difference is positive, it is an
increase.
• Divide the change by the earlier year's balance. The
result is the percentage change.
18. Common size statement
A company financial statement that
displays all items as percentages of a common
base figure. This type of financial statement
allows for easy analysis between companies or
between time periods of a company.
19. Working capital analysis
An analysis to determine changes in working
capital is to compare its sources with its uses.
Recall that transactions involving only current
asset and current liability accounts have no
net effect on working capital.
20. Cash flow statement analysis
to determine how a company uses its cash
assets. The choice to use cash to acquire an
asset, to meet a liability, or to retire a debt is a
process of investment and disinvestment, and
a manager always has choices to make, some
smart and some maladroit. It’s important to
keep track of how well a company’s
management is making these choices.
21. Ratio analysis
It's comparing the number against
previous years, other companies, the industry
or even the economy in general. Ratios look at
the relationships between individual values
and relate them to how a company has
performed in the past, and how it might
perform in the future.
22. Gross profit analysis
is designed to pick apart the reasons why
the gross profit margin changes from period to
period, so that management can take steps to
bring the gross margin in line with
expectations. A decline in gross profits can be
an indicator of serious problems, so the figure
is closely watched.
23. Break even analysis
An analysis to determine the point at
which revenue received equals the costs
associated with receiving the revenue. Break-
even analysis calculates what is known as a
margin of safety, the amount that revenues
exceed the break-even point. This is the
amount that revenues can fall while still
staying above the break-even point.