This presentation introduces the reader to the multidimensional model used for digital financial reporting. Also see this video, https://www.youtube.com/watch?v=A5AAruLUud4
Retirement saving with contribution payments and labor income as a benchmark ...Nicha Tatsaneeyapan
This document summarizes a research paper about modeling retirement savings when contributions are made and labor income is used as a benchmark for investments. The key points are:
1) A retirement savings model is presented where a plan sponsor makes contributions to finance an employee's retirement. The goal is to ensure the employee can maintain their consumption after retiring based on their labor income.
2) Dynamic programming is used to derive optimal investment and contribution strategies as functions of the wealth-to-income ratio and wage growth rate.
3) The analysis finds that contribution payments significantly increase risk-taking at low wealth levels. It also finds that considering downside risk can paradoxically increase risky investing at low wealth levels due to increasing relative risk
This document provides an introduction to economics for social entrepreneurs, covering topics such as the law of demand, forecasting methods, costs, and monetary theories. It discusses concepts like production possibility curves, decision trees, and the objectives of firms. The document presents economics as both an art and a normative science, and explores quantitative and qualitative forecasting approaches.
The document outlines the foundational building blocks of a financial report:
1) Scalars are standalone facts like the value of pi.
2) Facts are pieces of information reported, like revenues of 2000.
3) Characteristics describe facts, like the concept of revenues relating to the 2000 value.
4) Relations show how facts are connected, like gross profit relating to revenues minus costs.
5) Components comprise related facts and make up parts of a report, like an income statement.
Facts reported in financial reports can include numeric values, text, or prose. A fact contains a value and characteristics that describe the value such as the reporting period or concept. Numeric values also have additional traits like units and rounding. Facts may include parenthetical explanations to provide more context about the value.
The document discusses characteristics in financial reports. It states that characteristics describe facts and lists some common characteristics like reporting entity, legal entity, period, and concept. Characteristics can also be related to each other in complex ways through hierarchies and partial/complete sets.
Using Financial Forecasts to Advise Business - Method of Forecasting - RevisedIrma Miller
This document discusses various methods for forecasting future financial needs, including qualitative and quantitative approaches. It outlines steps in the forecasting process such as projecting sales, expenses, investment needs, and determining financing requirements. Specific forecasting techniques are described, such as naive forecasts, moving averages, regression analysis, and more. The document also covers financial analysis methods like ratio analysis, variance analysis, benchmarking, and break-even analysis. Finally, it discusses top-down vs. bottom-up forecasting and different approaches to building budgets such as incremental, zero-based, and activity-based budgeting.
Finance is the language of business. You have to make the best decisions possible for yours or your client’s business. And, understanding financial analysis is the key to making this happen.
Retirement saving with contribution payments and labor income as a benchmark ...Nicha Tatsaneeyapan
This document summarizes a research paper about modeling retirement savings when contributions are made and labor income is used as a benchmark for investments. The key points are:
1) A retirement savings model is presented where a plan sponsor makes contributions to finance an employee's retirement. The goal is to ensure the employee can maintain their consumption after retiring based on their labor income.
2) Dynamic programming is used to derive optimal investment and contribution strategies as functions of the wealth-to-income ratio and wage growth rate.
3) The analysis finds that contribution payments significantly increase risk-taking at low wealth levels. It also finds that considering downside risk can paradoxically increase risky investing at low wealth levels due to increasing relative risk
This document provides an introduction to economics for social entrepreneurs, covering topics such as the law of demand, forecasting methods, costs, and monetary theories. It discusses concepts like production possibility curves, decision trees, and the objectives of firms. The document presents economics as both an art and a normative science, and explores quantitative and qualitative forecasting approaches.
The document outlines the foundational building blocks of a financial report:
1) Scalars are standalone facts like the value of pi.
2) Facts are pieces of information reported, like revenues of 2000.
3) Characteristics describe facts, like the concept of revenues relating to the 2000 value.
4) Relations show how facts are connected, like gross profit relating to revenues minus costs.
5) Components comprise related facts and make up parts of a report, like an income statement.
Facts reported in financial reports can include numeric values, text, or prose. A fact contains a value and characteristics that describe the value such as the reporting period or concept. Numeric values also have additional traits like units and rounding. Facts may include parenthetical explanations to provide more context about the value.
The document discusses characteristics in financial reports. It states that characteristics describe facts and lists some common characteristics like reporting entity, legal entity, period, and concept. Characteristics can also be related to each other in complex ways through hierarchies and partial/complete sets.
Using Financial Forecasts to Advise Business - Method of Forecasting - RevisedIrma Miller
This document discusses various methods for forecasting future financial needs, including qualitative and quantitative approaches. It outlines steps in the forecasting process such as projecting sales, expenses, investment needs, and determining financing requirements. Specific forecasting techniques are described, such as naive forecasts, moving averages, regression analysis, and more. The document also covers financial analysis methods like ratio analysis, variance analysis, benchmarking, and break-even analysis. Finally, it discusses top-down vs. bottom-up forecasting and different approaches to building budgets such as incremental, zero-based, and activity-based budgeting.
Finance is the language of business. You have to make the best decisions possible for yours or your client’s business. And, understanding financial analysis is the key to making this happen.
The document discusses understanding relations in financial reports. It explains that facts are not random or isolated, but rather have patterns and relations to other facts. Various types of relations are described, including relations between facts in an income statement, between characteristics, concepts, and components. Examples of related facts in an income statement are provided to illustrate how facts can be interrelated.
This document provides an overview of financial statement analysis and various methods used for analysis. It discusses the key users and purposes of analysis, as well as common analysis techniques like horizontal analysis, vertical analysis, trend analysis, and ratio analysis. It then provides an example of calculating ratios for a company called Norton Corporation using information from their financial statements.
This document provides an overview of financial statement analysis. It discusses the key types of financial statements - the balance sheet, income statement, statement of cash flows, and statement of owner's equity. It then covers approaches to financial analysis, including horizontal analysis, vertical analysis, common-size statements, and financial ratio analysis. Specific accounting ratios are defined that measure profitability, liquidity, solvency, activity, and investment valuation. The document aims to teach students how to interpret and compare financial performance across companies and time periods using these analytical techniques.
Financial statement analysis involves various techniques to evaluate a company's financial health and performance, including ratio analysis. Ratio analysis calculates statistical relationships between financial data points to gain insights. Key ratios discussed in the document include liquidity ratios like the current ratio and quick ratio, leverage ratios like the debt-to-equity ratio, activity ratios like inventory turnover ratio, and profitability ratios. Calculating and analyzing ratios helps understand a company's liquidity, creditworthiness, operational efficiency, and profit generating ability.
Accounting provides essential information for organizations to make decisions and measure performance. It identifies, measures, records, and communicates financial information. The accounting process allows organizations to determine value created through transformations of resources and profits earned. However, accounting relies on assumptions and constraints that could impact profit calculations if invalid. Management selection of accounting policies can affect financial statements and influence economic consequences and stakeholder perceptions.
This document outlines learning objectives and key concepts for an introductory accounting course. It describes the purpose and structure of key financial statements including the income statement, balance sheet, statement of retained earnings, and statement of cash flows. It also defines important accounting terms, principles, assumptions, and qualitative characteristics used to measure and communicate economic information between businesses.
Financial and Managerial Accounting NoteAbdulAhmed73
This document provides an overview of financial statement analysis. It discusses the different types of financial statement analysis including horizontal analysis, vertical analysis, comparative statement analysis, trend analysis, common size analysis, funds flow analysis, cash flow statement analysis, and ratio analysis. It outlines the different ratios used in financial analysis including liquidity ratios, activity ratios, solvency/leverage ratios, and profitability ratios. It also discusses the different users of financial statement analysis and their interests including lenders, shareholders/investors, employees, regulatory agencies, and management.
Jimmy Gentry on 'Financial Statements II" at Reynolds Business Journalism Week, Feb. 4-7, 2011.
Reynolds Center for Business Journalism, BusinessJournalism.org, Arizona State University's Walter Cronkite School of Journalism.
The document discusses techniques of financial statement analysis, specifically trend analysis and ratio analysis. It provides an overview of trend analysis, including how to calculate trend percentages, advantages and limitations. It also outlines different types of ratios, categories of ratios, and objectives and advantages of ratio analysis, such as simplifying data, comparative analysis between periods and companies, locating weaknesses, and effective management control.
The document discusses trend analysis and ratio analysis techniques of financial statement analysis. It provides definitions and formulas for trend analysis, including calculating trend percentages by dividing figures in other years by a base year. It also discusses advantages and limitations of trend analysis. Ratio analysis is then introduced, including different types of ratios and their uses in analyzing profitability, liquidity, solvency, operating efficiency and risk. Objectives and advantages of ratio analysis are outlined. Common limitations of ratio analysis are also presented.
This document provides an overview of financial statement analysis techniques including horizontal analysis, vertical analysis, common-size statements, trend percentages, and ratio analysis. It discusses various liquidity, profitability, and market ratios and provides an example of calculating ratios for Norton Corporation using information from their financial statements. Key ratios discussed include the current ratio, acid-test ratio, accounts receivable turnover, inventory turnover, equity ratio, return on sales, and return on equity.
115
Financial and
Operating Ratios as
Performance
Measure s
11
C H A P T E R
THE IMPORTANCE OF RATIOS
Ratios are convenient and uniform measures that are
widely adopted in healthcare financial management.
They are important because they are so widely used, es-
pecially because they are used for credit analysis. But a
ratio is only a number. It has to be considered within the
context of the operation. There is another caveat: ratio
analysis should be conducted as a comparative analysis. In
other words, one ratio standing alone with nothing to
compare it with does not mean very much. When inter-
preting ratios, the differences between periods must be
considered, and the reasons for such differences should
be sought. It is a good practice to compare results with
equivalent computations from outside the organization—
regional figures from similar institutions would be a good
example of such outside sources. Caution and good man-
agerial judgment must always be exercised when working
with ratios.
Financial ratios basically pull together two elements of
the financial statements: one expressed as the numerator
and one as the denominator. To calculate a ratio, divide
the bottom number (the denominator) into the top
number (the numerator). The Case Study in Appendix
25-A entitled “Using Financial Ratios and Benchmark-
ing: A Case Study in Comparative Analysis” uses financial
ratios as indicators of financial position. We highly rec-
ommend that you spend time with this Case Study, as it
will add depth and background to the contents of this
chapter.
In this chapter we examine liquidity, solvency, and
profitability ratios. Exhibit 11-1 sets out eight basic ratios
After completing this chapter,
you should be able to
1. Understand four types of
liquidity ratios.
2. Understand two types of
solvency ratios.
3. Understand two types of
profitability ratios.
4. Successfully compute ratios.
P r o g r e s s N o t e s
116 CHAPTER 11 Financial and Operating Ratios as Performance Measures
Exhibit 11–1 Eight Basic Ratios Used in Health Care
Liquidity Ratios
1. Current Ratio
Current Assets
Current Liabilities
2. Quick Ratio
Cash and Cash Equivalents + Net Receivables
Current Liabilities
3. Days Cash on Hand (DCOH)
Unrestricted Cash and Cash Equivalents
Cash Operation Expenses ÷ No. of Days in Period (365)
4. Days Receivables
Net Receivables
Net Credit Revenues ÷ No. of Days in Period (365)
Solvency Ratios
5. Debt Service Coverage Ratio (DSCR)
Change in Unrestricted Net Assets (net income)
+ Interest, Depreciation, Amortization
Maximum Annual Debt Service
6. Liabilities to Fund Balance
Total Liabilities
Unrestricted Fund Balances
Profitability Ratios
7. Operating Margin (%)
Operating Income (Loss)
Total Operating Revenues
8. Return on Total Assets (%)
EBIT (Earnings before Interest and Taxes)
Total Assets
Courtesy of Resource Group, Ltd., Dallas, Texas.
that are widely used in healthcare organizations: four liquidity ty.
The document discusses various financial ratios used for analysis. It begins by defining ratio analysis and its importance. It then categorizes ratios into liquidity ratios, activity ratios, profitability ratios, and leverage ratios. Specific ratios discussed in detail include current ratio, quick ratio, inventory turnover ratio, debtors turnover ratio, gross profit ratio, net profit ratio, operating profit ratio, EPS, and debt-equity ratio. Formulas for calculating these ratios are provided. Examples are given to demonstrate calculating some of these ratios.
All accounting instructionsWeek 2SEC 10K Assignment The Bal.docxnettletondevon
All accounting instructions
Week 2/SEC 10K Assignment The Balance Sheet and Credit Risk Analysis
Credit risk encompasses a company’s ability to meet its obligations as they arise as well as a long-run ability to pay its debt. A company may be profitable but yet face bankruptcy if it is unable to pay its liabilities on time. Companies with large amounts of debt have greater credit risk because of an increased vulnerability to increases in interest rates and declines in profitability.
In this assignment, you will answer questions about your company’s classified balance sheet and conduct a ratio analysis to evaluate the company’s liquidity and solvency. A financial ratio expresses the relationship of one amount to another and enables analysts to quickly assess a company’s financial strength, profitability, or other aspects of its financial activities.
Requirements
In the first section, define liabilities and describe how liabilities are classified as current and long-term (give examples). Also define liquidity and solvency as it relates to the company’s debt-paying ability. What does your company call its ‘Balance Sheet’?
In the second section, define working capital, the current ratio, and the debt ratio, three frequently used ratios to assess credit risk (described in LEO’s online text or any principles of accounting text). Identify which are a measure of liquidity and which are a measure of solvency. Indicate how the ratio is interpreted. Is an increasing or decreasing ratio a favorable trend? Conduct online research to provide a ratio level (or range) that is considered acceptable for the current and debt ratio (technically, working capital is not a ratio so an average isn’t meaningful). If you can find information on acceptable ranges for the current ratio and debt ratio for your company’s industry, include that in your discussion. Numbers and ratios are more meaningful when considered relative to a benchmark. Benchmarks can be the company’s past performance, a similar company’s performance, an industry average, or a rule-of- thumb. For instance, for decades, a current ratio of 2 to 1 was considered satisfactory.
In the third section, prepare a table giving the dollar amount of current and long-term liabilities for the most recent year and the previous year. Either in the same table or a new table report the results of a ratio analysis. Calculate working capital, current ratio, and the debt ratio for the current year and the past year (show your calculations). Indicate whether the ratios are improving or deteriorating. If you find a relevant benchmark (industry average or rule-of-thumb), comment on your company’s performance relative to the benchmark.
Finally, in the fourth section briefly summarize results of any or all of the following: 1) an internet search for articles on recent events that may affect your company’s debt paying ability, 2) an internet search for financial analysts’ assessment of the company’s credit risk and or.
The document discusses key concepts in accounting including the balance sheet, accounting equation, journal entries, T-accounts, and financial statements. It provides examples of analyzing transactions for a company called Papa John's Pizza and how the accounting equation stays balanced. The accounting cycle and process of tracking account balances through the general journal, general ledger, and financial statements is also summarized.
Analyzing The Functions Of A Business, Many Relies On...Jasmine Culbreth
Financial statement analysis and ratio analysis are useful tools for evaluating a company's financial health and performance over time. Ratio analysis examines various financial metrics to identify strengths, weaknesses, and trends. Some key ratios analyzed include liquidity ratios, which measure a company's ability to meet short-term obligations, and profitability ratios, which indicate how effectively a company generates profits from its resources and sales. Ratio analysis is an important part of the financial statement analysis process for managers, investors, and other stakeholders.
USING FINANCIAL STATEMENTS INFORMATIONDoulat panah
This document discusses financial statement analysis and the time value of money. It covers:
- Reasons for analyzing financial statements like performance evaluation and checking projections.
- Benchmarking methods like comparing to peers or historical trends.
- Calculating future value over time using compound interest formulas for single deposits or regular cash flows.
- How present value considers the time value of money by discounting future cash flows.
1. The document discusses various financial concepts including total assets, net worth, financial ratios, estate planning, and types of wills.
2. Total assets refers to all resources owned by an entity, including physical and intangible assets. Calculating total assets provides an overview of financial health.
3. Net worth is the value of assets minus liabilities, representing an individual or entity's financial position.
4. Financial ratios are quantitative tools used to analyze a company's performance over time and compare to other companies in the same industry. The main ratios are liquidity, leverage, profitability, and efficiency.
5. Estate planning is the process of transferring assets upon death through documents like
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 journal document discusses representing journal entries using XBRL standards. It notes files and documentation locations for a master journal representation. The sole purpose of the journal representation is to test that journal entries interact correctly with trial balance roll forwards. Representing journal entries using XBRL Dimensions and the XBRL Global Ledger framework is also mentioned, as well as summarizing journal entries, ledgers, and rolling forward ledger account balances.
More Related Content
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The document discusses understanding relations in financial reports. It explains that facts are not random or isolated, but rather have patterns and relations to other facts. Various types of relations are described, including relations between facts in an income statement, between characteristics, concepts, and components. Examples of related facts in an income statement are provided to illustrate how facts can be interrelated.
This document provides an overview of financial statement analysis and various methods used for analysis. It discusses the key users and purposes of analysis, as well as common analysis techniques like horizontal analysis, vertical analysis, trend analysis, and ratio analysis. It then provides an example of calculating ratios for a company called Norton Corporation using information from their financial statements.
This document provides an overview of financial statement analysis. It discusses the key types of financial statements - the balance sheet, income statement, statement of cash flows, and statement of owner's equity. It then covers approaches to financial analysis, including horizontal analysis, vertical analysis, common-size statements, and financial ratio analysis. Specific accounting ratios are defined that measure profitability, liquidity, solvency, activity, and investment valuation. The document aims to teach students how to interpret and compare financial performance across companies and time periods using these analytical techniques.
Financial statement analysis involves various techniques to evaluate a company's financial health and performance, including ratio analysis. Ratio analysis calculates statistical relationships between financial data points to gain insights. Key ratios discussed in the document include liquidity ratios like the current ratio and quick ratio, leverage ratios like the debt-to-equity ratio, activity ratios like inventory turnover ratio, and profitability ratios. Calculating and analyzing ratios helps understand a company's liquidity, creditworthiness, operational efficiency, and profit generating ability.
Accounting provides essential information for organizations to make decisions and measure performance. It identifies, measures, records, and communicates financial information. The accounting process allows organizations to determine value created through transformations of resources and profits earned. However, accounting relies on assumptions and constraints that could impact profit calculations if invalid. Management selection of accounting policies can affect financial statements and influence economic consequences and stakeholder perceptions.
This document outlines learning objectives and key concepts for an introductory accounting course. It describes the purpose and structure of key financial statements including the income statement, balance sheet, statement of retained earnings, and statement of cash flows. It also defines important accounting terms, principles, assumptions, and qualitative characteristics used to measure and communicate economic information between businesses.
Financial and Managerial Accounting NoteAbdulAhmed73
This document provides an overview of financial statement analysis. It discusses the different types of financial statement analysis including horizontal analysis, vertical analysis, comparative statement analysis, trend analysis, common size analysis, funds flow analysis, cash flow statement analysis, and ratio analysis. It outlines the different ratios used in financial analysis including liquidity ratios, activity ratios, solvency/leverage ratios, and profitability ratios. It also discusses the different users of financial statement analysis and their interests including lenders, shareholders/investors, employees, regulatory agencies, and management.
Jimmy Gentry on 'Financial Statements II" at Reynolds Business Journalism Week, Feb. 4-7, 2011.
Reynolds Center for Business Journalism, BusinessJournalism.org, Arizona State University's Walter Cronkite School of Journalism.
The document discusses techniques of financial statement analysis, specifically trend analysis and ratio analysis. It provides an overview of trend analysis, including how to calculate trend percentages, advantages and limitations. It also outlines different types of ratios, categories of ratios, and objectives and advantages of ratio analysis, such as simplifying data, comparative analysis between periods and companies, locating weaknesses, and effective management control.
The document discusses trend analysis and ratio analysis techniques of financial statement analysis. It provides definitions and formulas for trend analysis, including calculating trend percentages by dividing figures in other years by a base year. It also discusses advantages and limitations of trend analysis. Ratio analysis is then introduced, including different types of ratios and their uses in analyzing profitability, liquidity, solvency, operating efficiency and risk. Objectives and advantages of ratio analysis are outlined. Common limitations of ratio analysis are also presented.
This document provides an overview of financial statement analysis techniques including horizontal analysis, vertical analysis, common-size statements, trend percentages, and ratio analysis. It discusses various liquidity, profitability, and market ratios and provides an example of calculating ratios for Norton Corporation using information from their financial statements. Key ratios discussed include the current ratio, acid-test ratio, accounts receivable turnover, inventory turnover, equity ratio, return on sales, and return on equity.
115
Financial and
Operating Ratios as
Performance
Measure s
11
C H A P T E R
THE IMPORTANCE OF RATIOS
Ratios are convenient and uniform measures that are
widely adopted in healthcare financial management.
They are important because they are so widely used, es-
pecially because they are used for credit analysis. But a
ratio is only a number. It has to be considered within the
context of the operation. There is another caveat: ratio
analysis should be conducted as a comparative analysis. In
other words, one ratio standing alone with nothing to
compare it with does not mean very much. When inter-
preting ratios, the differences between periods must be
considered, and the reasons for such differences should
be sought. It is a good practice to compare results with
equivalent computations from outside the organization—
regional figures from similar institutions would be a good
example of such outside sources. Caution and good man-
agerial judgment must always be exercised when working
with ratios.
Financial ratios basically pull together two elements of
the financial statements: one expressed as the numerator
and one as the denominator. To calculate a ratio, divide
the bottom number (the denominator) into the top
number (the numerator). The Case Study in Appendix
25-A entitled “Using Financial Ratios and Benchmark-
ing: A Case Study in Comparative Analysis” uses financial
ratios as indicators of financial position. We highly rec-
ommend that you spend time with this Case Study, as it
will add depth and background to the contents of this
chapter.
In this chapter we examine liquidity, solvency, and
profitability ratios. Exhibit 11-1 sets out eight basic ratios
After completing this chapter,
you should be able to
1. Understand four types of
liquidity ratios.
2. Understand two types of
solvency ratios.
3. Understand two types of
profitability ratios.
4. Successfully compute ratios.
P r o g r e s s N o t e s
116 CHAPTER 11 Financial and Operating Ratios as Performance Measures
Exhibit 11–1 Eight Basic Ratios Used in Health Care
Liquidity Ratios
1. Current Ratio
Current Assets
Current Liabilities
2. Quick Ratio
Cash and Cash Equivalents + Net Receivables
Current Liabilities
3. Days Cash on Hand (DCOH)
Unrestricted Cash and Cash Equivalents
Cash Operation Expenses ÷ No. of Days in Period (365)
4. Days Receivables
Net Receivables
Net Credit Revenues ÷ No. of Days in Period (365)
Solvency Ratios
5. Debt Service Coverage Ratio (DSCR)
Change in Unrestricted Net Assets (net income)
+ Interest, Depreciation, Amortization
Maximum Annual Debt Service
6. Liabilities to Fund Balance
Total Liabilities
Unrestricted Fund Balances
Profitability Ratios
7. Operating Margin (%)
Operating Income (Loss)
Total Operating Revenues
8. Return on Total Assets (%)
EBIT (Earnings before Interest and Taxes)
Total Assets
Courtesy of Resource Group, Ltd., Dallas, Texas.
that are widely used in healthcare organizations: four liquidity ty.
The document discusses various financial ratios used for analysis. It begins by defining ratio analysis and its importance. It then categorizes ratios into liquidity ratios, activity ratios, profitability ratios, and leverage ratios. Specific ratios discussed in detail include current ratio, quick ratio, inventory turnover ratio, debtors turnover ratio, gross profit ratio, net profit ratio, operating profit ratio, EPS, and debt-equity ratio. Formulas for calculating these ratios are provided. Examples are given to demonstrate calculating some of these ratios.
All accounting instructionsWeek 2SEC 10K Assignment The Bal.docxnettletondevon
All accounting instructions
Week 2/SEC 10K Assignment The Balance Sheet and Credit Risk Analysis
Credit risk encompasses a company’s ability to meet its obligations as they arise as well as a long-run ability to pay its debt. A company may be profitable but yet face bankruptcy if it is unable to pay its liabilities on time. Companies with large amounts of debt have greater credit risk because of an increased vulnerability to increases in interest rates and declines in profitability.
In this assignment, you will answer questions about your company’s classified balance sheet and conduct a ratio analysis to evaluate the company’s liquidity and solvency. A financial ratio expresses the relationship of one amount to another and enables analysts to quickly assess a company’s financial strength, profitability, or other aspects of its financial activities.
Requirements
In the first section, define liabilities and describe how liabilities are classified as current and long-term (give examples). Also define liquidity and solvency as it relates to the company’s debt-paying ability. What does your company call its ‘Balance Sheet’?
In the second section, define working capital, the current ratio, and the debt ratio, three frequently used ratios to assess credit risk (described in LEO’s online text or any principles of accounting text). Identify which are a measure of liquidity and which are a measure of solvency. Indicate how the ratio is interpreted. Is an increasing or decreasing ratio a favorable trend? Conduct online research to provide a ratio level (or range) that is considered acceptable for the current and debt ratio (technically, working capital is not a ratio so an average isn’t meaningful). If you can find information on acceptable ranges for the current ratio and debt ratio for your company’s industry, include that in your discussion. Numbers and ratios are more meaningful when considered relative to a benchmark. Benchmarks can be the company’s past performance, a similar company’s performance, an industry average, or a rule-of- thumb. For instance, for decades, a current ratio of 2 to 1 was considered satisfactory.
In the third section, prepare a table giving the dollar amount of current and long-term liabilities for the most recent year and the previous year. Either in the same table or a new table report the results of a ratio analysis. Calculate working capital, current ratio, and the debt ratio for the current year and the past year (show your calculations). Indicate whether the ratios are improving or deteriorating. If you find a relevant benchmark (industry average or rule-of-thumb), comment on your company’s performance relative to the benchmark.
Finally, in the fourth section briefly summarize results of any or all of the following: 1) an internet search for articles on recent events that may affect your company’s debt paying ability, 2) an internet search for financial analysts’ assessment of the company’s credit risk and or.
The document discusses key concepts in accounting including the balance sheet, accounting equation, journal entries, T-accounts, and financial statements. It provides examples of analyzing transactions for a company called Papa John's Pizza and how the accounting equation stays balanced. The accounting cycle and process of tracking account balances through the general journal, general ledger, and financial statements is also summarized.
Analyzing The Functions Of A Business, Many Relies On...Jasmine Culbreth
Financial statement analysis and ratio analysis are useful tools for evaluating a company's financial health and performance over time. Ratio analysis examines various financial metrics to identify strengths, weaknesses, and trends. Some key ratios analyzed include liquidity ratios, which measure a company's ability to meet short-term obligations, and profitability ratios, which indicate how effectively a company generates profits from its resources and sales. Ratio analysis is an important part of the financial statement analysis process for managers, investors, and other stakeholders.
USING FINANCIAL STATEMENTS INFORMATIONDoulat panah
This document discusses financial statement analysis and the time value of money. It covers:
- Reasons for analyzing financial statements like performance evaluation and checking projections.
- Benchmarking methods like comparing to peers or historical trends.
- Calculating future value over time using compound interest formulas for single deposits or regular cash flows.
- How present value considers the time value of money by discounting future cash flows.
1. The document discusses various financial concepts including total assets, net worth, financial ratios, estate planning, and types of wills.
2. Total assets refers to all resources owned by an entity, including physical and intangible assets. Calculating total assets provides an overview of financial health.
3. Net worth is the value of assets minus liabilities, representing an individual or entity's financial position.
4. Financial ratios are quantitative tools used to analyze a company's performance over time and compare to other companies in the same industry. The main ratios are liquidity, leverage, profitability, and efficiency.
5. Estate planning is the process of transferring assets upon death through documents like
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.
Similar to Introduction to the Multidimensional Model for Professional Accountants (20)
This journal document discusses representing journal entries using XBRL standards. It notes files and documentation locations for a master journal representation. The sole purpose of the journal representation is to test that journal entries interact correctly with trial balance roll forwards. Representing journal entries using XBRL Dimensions and the XBRL Global Ledger framework is also mentioned, as well as summarizing journal entries, ledgers, and rolling forward ledger account balances.
This document provides information about a trial balance, including files and documentation links. It discusses that a trial balance is orthogonal to the accounting equation and common financial statement elements. A trial balance serves two purposes: to test roll forwards and make a point, and to test the connection between the trial balance and financial reports. It also lists some common account terms that would be included in a trial balance, along with roll forwards for each account.
This document summarizes the results of analyzing over 6,000 XBRL financial reports submitted to the SEC. It found that the reports contained over 8.5 million facts organized into various concept arrangement patterns. The most common patterns were text blocks (54% of fact sets), sets (24% of fact sets), and roll ups (16% of fact sets). The document concludes that any additional information added to an XBRL report can be represented through a combination of the nine identified concept arrangement patterns, ensuring the information is logically correct and consistent.
This document discusses common elements of financial statements. It identifies key components such as assets, liabilities, equity, revenues, and expenses. It also notes the accounting equation of assets equaling liabilities plus equity. Additionally, it outlines new terms, structures, and assertions that have been added to financial statements over time, making them more robust. The document aims to define and explain the core building blocks that comprise financial statements.
SFAC 6 Elements of Financial Statements Representation in XBRLCharles Hoffman
The document discusses the elements of financial statements according to SFAC 6. It defines key terms like assets, liabilities, equity, revenues, and expenses. It explains the structure of the three basic financial statements: the balance sheet, income statement, and statement of changes in equity. It provides examples of the accounting equation that must balance and formulas that define the relationships between elements in the financial statements.
The document discusses representations of the accounting equation. It defines the accounting equation as Assets = Liabilities + Equity. It then explains how the accounting equation can be represented using terms, structures, associations, rules, and facts in XBRL. Specifically, it represents the terms as assets, liabilities, equity, and balance sheet. It represents the structure as the balance sheet and defines rules and associations to show the relationships between assets, liabilities, equity, and the balance sheet. It provides example facts showing values for assets, liabilities, and equity for a sample company.
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Introduction to the Multidimensional Model for Professional Accountants
1. Introduction to the
Multidimensional Model for
Professional Accountants
Financial Report Semantics and
Dynamics Theory
By Charles Hoffman, CPA
https://creativecommons.org/publicdomain/zero/1.0/
2. Overview
• Models help communication and provide a
framework for understanding
• Everyone works with multidimensional
information every day
• Multidimensional model overview
• Why is the Important?
3. Models Help Communication and Understanding
• Electronic spreadsheet model
– Workbook, spreadsheet, column, row, cell
4. Everyone Works with Multidimensional Information
Every Day
• Most things are inherently multidimensional
• Financial information is absolutely
multidimensional
– reporting economic entity
– reporting scenario (actual, budgeted, forecast)
– period
– business segment
– geographic entity
– class of stock
– debt instrument
5. Reconciliation of Terminology to BI Dimensional Model
Our Term BI Term Comments
Fact Record or Row BI is more focused numeric facts
Characteristic Dimension A dimension is a technical artifact used to describe a
characteristic
Relation Hierarchy BI is limited to one type of relation, the hierarchy, which is
a navigational path through information; information has
many different types of relations
Grain Grain Same meaning
Fact Value Measure In BI measures are always numeric
Fact Table Fact Table In BI fact tables are not related to or intersect with other
fact tables and total are computed not explicit; in our
model intersections can exist and totals are explicit
BI (business intelligence) terms tend to represent the technical artifacts that are used to represent real world
business phenomenon. Our terms describe the business phenomenon themselves, not a technical
implementation. Further, BI dimensional model which is based on OLAP works slightly differently than our
model which describes how the real world works. For example, in the real world there are numbers and text
and prose; but OLAP is focused on numbers. In the real world, financial reports provide totals and in OLAP;
totals are calculated. Our model describes the real world. BI describes an implementation. Further, BI is non-
standard so every implementation can use different terms and our model is based on XBRL, a global standard.
6. Multidimensional Model Overview
• Multidimensional model overview
– Fact
– Characteristic
– Fact Value
– Fact Table
– Relation
– Grain
7. Understanding Facts by Understanding a Scalar
Fact Value
3.14
A scalar is a fact which has no characteristics, it
stands on its own.
For example, the value of pi is a scalar, it never
changes; it always has the same value for everyone.
(Pi or π is the ratio of a circle's circumference to its
diameter and always has the value of equal to 3.14)
8. Fact
Fact Value
2000
1000
A fact defines a single, observable, reportable piece of information contained within a financial
report, or fact value, contextualized for unambiguous interpretation or analysis by one or more
distinguishing characteristics. Facts can be numbers, text, or prose.
For example, the two facts above with the values of “2000” and “1000”. However, the two facts
above are not contextualized.
9. Characteristic
Concept Value
Revenues 2000
Net income 1000
A characteristic describes a fact (a characteristic is a property of a fact). A characteristic provides
information necessary to describe a fact and distinguish one fact from another fact. A fact may have one
or many distinguishing characteristics.
For example, a characteristic of the number “2000” above is that it relates to revenues as opposed to
the number “1000” which relates to net income .
10. Characteristics
Reporting entity Legal entity Period Concept Value
ABC Company Consolidated entity Jan 1, 2011 to Dec 31, 2011 Revenues 2000
ABC Company Consolidated entity Jan 1, 2011 to Dec 31, 2011 Net income 1000
Financial facts can have a number of characteristics.
For example, some common characteristics include the reporting entity, legal entity, period, and concept
which describe a reported financial fact.
11. Fact Value
Reporting
entity
Legal entity Period Concept Value Units Rounding
ABC
Company
Consolidated entity Jan 1, 2011 to Dec 31,
2011
Revenues 2000 US Dollars Thousands
of dollars
ABC
Company
Consolidated entity Jan 1, 2011 to Dec 31,
2011
Net income 1000 US Dollars Thousands
of dollars
And so a fact is the value and all of the characteristics which describe the value (including the traits which
further describe numeric values).
Above we know that the value “2000” is for the concept “Revenues”, for the period “Jan 1, 2011 to Dec 31,
2011”, relates to the legal entity “Consolidated entity”, of the reporting entity “ABC Company”. We also
know that the numeric value is expressed in the units US Dollars and are rounded to the nearest thousands
of dollars.
Units and rounding are traits that describe the numeric facts. (Some people think that Units and Rounding
are characteristics rather than traits.)
12. Fact Table
Reporting
entity
Legal
entity
Geographic
area
Period Concept Value Units Rounding
ABC
Company
Consolidated
entity
All Geographic
Areas Combined
Jan 1, 2011 to
Dec 31, 2011
Revenues 2000 US
Dollars
Thousands of
dollars
ABC
Company
Consolidated
entity
North America Jan 1, 2011 to
Dec 31, 2011
Revenues 1000 US
Dollars
Thousands of
dollars
ABC
Company
Consolidated
entity
South America Jan 1, 2011 to
Dec 31, 2011
Revenues 1000 US
Dollars
Thousands of
dollars
A fact table is a set of facts which go together for some specific reason. All the facts in a fact table share the
same characteristics.
Above you see a fact table (outlined in green) that contains three facts (each outlined in red). Each of the
three facts share the characteristics “Reporting entity”, “Legal entity”, “Geographic area”, “Period” and
“Concept”.
13. Relations
Reporting
entity
Legal entity Geographic
area
Period Concept Value Units Rounding
ABC
Company
Consolidated
entity
All Geographic
Areas Combined
Jan 1, 2011 to
Dec 31, 2011
Revenues 2000 US
Dollars
Thousands of
dollars
ABC
Company
Consolidated
entity
North America Jan 1, 2011 to
Dec 31, 2011
Revenues 1000 US
Dollars
Thousands of
dollars
ABC
Company
Consolidated
entity
South America Jan 1, 2011 to
Dec 31, 2011
Revenues 1000 US
Dollars
Thousands of
dollars
A relation is how one thing in a business report is or can be related to some other thing in a business report.
These relations are often called business rules. There are three primary types of relations (others can exist).
• Whole-part: something composed exactly of their parts and nothing else; the sum of the parts is equal
to the whole (roll up).
• Is-a: descriptive and differentiates one type or class of thing from some different type or class of thing;
but the things do not add up to a whole.
• Computational business rule: Other types of computational business rules can exist such as “Beginning
balance + changes = Ending Balance” (roll forward) or “Net income (loss) / Weighted average shares =
Earnings per share”
So above we know that the value “2000” is for the concept “Revenues”, for the period “Jan 1, 2011 to Dec
31, 2011”, relates to the legal entity “Consolidated entity”, of the reporting entity “ABC Company” and is the
total of all “Geographic Areas”. “North America” and “South America” are part of the whole “All
Geographic Areas Combined”.
14. Grain
Reporting
entity
Legal
entity
Geographic
area
Period Concept Value Units Rounding
ABC
Company
Consolidated
entity
All Geographic
Areas Combined
Jan 1, 2011 to
Dec 31, 2011
Revenues 2000 US
Dollars
Thousands of
dollars
ABC
Company
Consolidated
entity
North America Jan 1, 2011 to
Dec 31, 2011
Revenues 1000 US
Dollars
Thousands of
dollars
ABC
Company
Consolidated
entity
South America Jan 1, 2011 to
Dec 31, 2011
Revenues 1000 US
Dollars
Thousands of
dollars
Grain is the level of depth of information or granularity. The lowest level of granularity is the actual
transaction, event, circumstance, or other phenomenon represented in a financial report.
So above we know that the value “2000” is for the concept “Revenues”, for the period “Jan 1, 2011 to Dec
31, 2011”, relates to the legal entity “Consolidated entity”, of the reporting entity “ABC Company” and is the
total of all “Geographic Areas”. That describes the first fact (outlined in red) which is one level of
granularity. The next two facts (outlined in green) are at a different level of granularity and describe the
parts of the geographic areas.
15. Why is this important?
https://upload.wikimedia.org/wikipedia/commons/d/d6/8-cell-orig.gif
Just like the workbooks, spreadsheets, columns, rows, and cells of a spreadsheet help you understand,
describe, and related to electronic spreadsheets; the multidimensional model helps you relate to XBRL-
based digital financial reports.
16. Summary
• Models help communication and provide a
framework for understanding
• Everyone works with multidimensional
information every day
• Multidimensional model overview
• Why is this Important?