Financial Statement Analysis
FINANCIAL STATEMENT ANALYSIS for Policy regarding expansion in future:
Analyzing financial statements involves evaluating three characteristics: a company’s liquidity, profitability and solvency. A short-term creditor such as a bank is primarily interested in liquidity – the borrower to pay obligations when they come due. A long-term creditor, such as a bondholder, looks to profitability and solvency measures that indicate the company’s ability to survive over a long period of time. Similarly, stockholders look at the profitability and solvency of the company and want to assess the likelihood of dividends and the growth potential of the stock. Three commonly used tools for financial statement analysis are: * Horizontal analysis evaluates a series of financial statement data over a period of time. * Vertical analysis evaluates financial statement data by expressing such item in a financial statement as a percentage of a base amount. * Ratio analysis expresses the relationship among selected items of financial statement data. Operating Result analysis: Operating Result | | 2011 | 2010 | Change in amount | Change in % | Net Sale | 7,890,241,843 | 6,490,847,353 | 1,399,394,490 | 22% | Cost of Goods Sold | 4,103,709,021 | 3,317,640,254 | 786,068,767 | 24% | Gross Profit | 3,786,532,822 | 3,173,207,099 | 613,325,723 | 19% | Operating Expenses : | 1,798,053,124 | 1,537,426,907 | 260,626,217 | 17% | Administrative Expenses | 275,201,846 | 233,413,980 | 41,787,866 | 18% | Selling, Marketing and Distribution Expenses | 1,522,851,278 | 1,304,012,927 | 218,838,351 | 17% | Operating Income | 1,988,479,698 | 1,635,780,192 | 352,699,506 | 22% | Other Income | 340,907,774 | 456,011,134 | -115,103,360 | -25% | Finance Cost | 567,645,757 | 662,182,384 | -94,536,627 | -14% | Profit Before Contribution to WPPF | 1,761,741,715 | 1,429,608,942
Analyzing financial statements involves evaluating three characteristics: a company’s liquidity, profitability and solvency. A short-term creditor such as a bank is primarily interested in liquidity – the borrower to pay obligations when they come due. A long-term creditor, such as a bondholder, looks to profitability and solvency measures that indicate the company’s ability to survive over a long period of time. Similarly, stockholders look at the profitability and solvency of the company and want to assess the likelihood of dividends and the growth potential of the stock. Three commonly used tools for financial statement analysis are: * Horizontal analysis evaluates a series of financial statement data over a period of time. * Vertical analysis evaluates financial statement data by expressing such item in a financial statement as a percentage of a base amount. * Ratio analysis expresses the relationship among selected items of financial statement data. Operating Result analysis: Operating Result | | 2011 | 2010 | Change in amount | Change in % | Net Sale | 7,890,241,843 | 6,490,847,353 | 1,399,394,490 | 22% | Cost of Goods Sold | 4,103,709,021 | 3,317,640,254 | 786,068,767 | 24% | Gross Profit | 3,786,532,822 | 3,173,207,099 | 613,325,723 | 19% | Operating Expenses : | 1,798,053,124 | 1,537,426,907 | 260,626,217 | 17% | Administrative Expenses | 275,201,846 | 233,413,980 | 41,787,866 | 18% | Selling, Marketing and Distribution Expenses | 1,522,851,278 | 1,304,012,927 | 218,838,351 | 17% | Operating Income | 1,988,479,698 | 1,635,780,192 | 352,699,506 | 22% | Other Income | 340,907,774 | 456,011,134 | -115,103,360 | -25% | Finance Cost | 567,645,757 | 662,182,384 | -94,536,627 | -14% | Profit Before Contribution to WPPF | 1,761,741,715 | 1,429,608,942