Financial Analysis: Selection, Evaluation, and Interpretation of Financial Data

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Far Eastern University
Dr. Yanga’s Colleges, Inc.

A Group Financial Analysis
Presented to
Prof. Ferdinand Importado
College of Business and Accountancy
Dr. Yanga’s Colleges, Inc.
Wakas, Bocaue, Bulacan

In Partial Fulfillment in the Subject
Management Accounting I

FLAMIANO, Lovely Elaine
PINEDA, SushmitaArha
STA. RITA, Danne Marvin

Financial analysis is the selection, evaluation and interpretation of financial data, along with other pertinent, to assist in investment and financial decision-making. Moreover, it is also the process of identifying financial strengths and weaknesses of the firm by properly establishing relationship between the items of the balance sheet and profit and loss accounts. When looking a specific company, the financial analyst will often focus on the income statement, balance sheet, and cash flows statement.

One of the most common ways of analyzing financial data is to calculate ratios from the data to compare against those of other companies or against the company’s own historical performance. For example, return on assets is a common ratio used to determine how efficient a company is at using its assets and as a measure of profitability. This ratio could be calculated for several similar companies and compared as part of a larger analysis.

Financial analysis converts raw information of financial statements in useful financial information. Only after financial analysis, we can use financial statements for decision making. This financial information is useful for planning for example; we can estimate our future ability of earning on advertising if we did financial analysis of our advertising expenses with direct return on the investment in advertising. Like this, we can do financial analysis of each and every item of profit and loss account, balance sheet and cash flow statement.

This study aims to analyze the financial statement of Dr. Yanga’s Colleges, Inc and Far Eastern University for the periods of 2007 to 2011 using financial statement analysis. This analysis are to apprehend the information contained in financial statements with a view to know the weaknesses and strengths of the firm and to make a forecast about the future prospects of the firm thereby, enabling the analysts to take decisions regarding the operation of, and further investment in, the firm. To be more specific, the analysis is undertaken to serve the following purposes (objectives): * Assessment of Past Performance. Past performance is a good indicator of future performance. * Assessment of current position. Financial statement analysis shows the current position of the firm in terms of the types of assets owned by a business firm and the different liabilities due against the enterprise. * Prediction of profitability and growth prospects. Financial statement analysis helps in assessing and predicting the earning prospects and growth rates in earning which are used by investors while comparing investment alternatives and other users in judging earning potential of business enterprise. * Prediction of bankruptcy and failure. Financial statement analysis is an important tool in assessing and predicting bankruptcy and probability of business failure. * Assessment of the operational efficiency. Financial statement analysis helps to assess the operational efficiency of the management of a company.

Dr. Yanga’s Colleges, Inc. Dr. Yanga’s Colleges, Inc. (DYCI) started as a non-sectarian secondary institution. It was established in 1950 as the Francisco Balagtas Academy (FBA). In 1987, the name of the institution was changed to Dr. Yanga’s Francisco Balagtas Colleges (DYFBC). Through the years, the school has been an integral part in the formation of many young men and women of Bulacan, metamorphosing into successful practitioners in their various fields of interest. In 2001, the name...
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