GROUP 1 REPORT FINANCIAL RATIOS Financial ratios are useful indicators of a firm’s performance and... financial situation. Most ratios can be calculated from information provided by the financial statements. Financial ratios can be used to analyze trends and to compare the firm’s financials to those of other firms. In some cases, ratio analysis can predict future bankruptcy. SOURCES OF DATA FOR FINANCIAL RATIOS Balance Sheet Income Statement Statement of Cash Flows Statement of Retained...
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Professor: Date of submission: Introduction Ratio analysis is a strategy used to aid in assessing the... financial position of an organization. In healthcare finance, there are a lot of financial ratios, which have multiple descriptions. This report focuses on roles and analysis of financial ratios by category. In addition, it describes the comparison of financial ratios and national norms in Baltimore hospital. Ratios used in financial conditions are primarily driven by comparative data from...
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TABLE OF CONTENTS INTRODUCTION 3 MANAGERIAL FINANCE: 3 FINANCIAL STATEMENTS ANALYSIS: 3 RATIO ANALYSIS: 3 FAUJI CEMENT... BALANCE SHEET AND PROFIT AND LOSS ACCOUNT 4 RATIO ANALYSIS: 9 INTRODUCTION MANAGERIAL FINANCE: • Managerial finance is concerned with the duties of the financial manager in the business firm. • The financial manager actively manages the financial affairs of any type of business, whether private or public, large or small, profit-seeking or not-for-profit...
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FINANCIAL RATIOS Financial ratios are indicators of a company’s performance as discernable from... the company’s Balance Sheet and income Statement. We will discuss some of the simple ratios of a company and talk about their significance. Liquidity Ratios: Show the company’s ability to pay of its current liabilities from its current assets. 1. Current Ratio Current assets should be significantly higher than current liabilities so that the current ratio is higher than 2:1. 2. Quick Ratio...
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RAOUL MUYENZI Financial Decision Making for Managers Spring 2011-2012 Ratio and... Financial Statement Analysis Benefits and Limitations. Executive Summary This paper analyzes tools used in financial analysis such as ratios. Financial ratio analysis is a judicious way for different stakeholders to use for different goals. This paper demonstrates that financial ratio analysis is an...
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In finance Ratio analysis is carried out to judge the liquidity of the organization. It helps the analysts to find if a company is capable... enough to pay its liabilities. Moreover it also helps to show the operating efficiency and internal return of an organization. Keep in mind that the ratio is good or bad only if it is compared to the industry in which the organization is operating in. Some of the important ratios are: * Current Ratio * Asset Test Ratio * Return on Asset *...
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major categories of ratios, and what questions do they answer? * Liquidity: Can we make required payments as they fall due? * Asset... management: Do we have the right amount of assets for the level of sales? * Debt management: Do we have the right mix of debt and equity? * Profitability: Do sales prices exceed unit costs, and are sales high enough as reflected in NPM, ROE, and ROA? * Market value: Do investors like what they see as reflected in P/E and M/B ratios? 2. What is...
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FINANCIAL STATEMENTS Accrual-based approach – revenues are recorded at the point of sale and costs when they are incurred, not necessarily... when a firm receives or pays out cash Cash flow approach – used by financial professionals to focus attention on current and prospective inflows and outflows of cash 1. Balance sheet a. Assets Cash and Cash Equivalents Marketable securities Accounts receivable Inventories Net property, plant and equipment Intangible assets b. Liabilities Accounts...
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Your Course Project Financial Statement Analysis Project -- A Comparative Analysis of Oracle Corporation and Microsoft Corporation Here is... the link for the financial statements for Oracle Corporation for the fiscal year ending 2011. First, select 2011 using the drop-down arrow labeled for Year on the right-hand side of the page, and then select Annual Reports using the drop-down arrow labeled Filing Type on the left-hand side of the page. You should select the 10k dated 6/28/2011 and choose...
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FINANCIAL RATIOS Gross Profit to Sales (Gross Profit Ratio): profitability ratio that shows the... relationship between gross profit and total net sales revenue. Gross margin/Net sales The gross margin is not an exact estimate of the company's pricing strategy but it does give a good indication of financial health. Without an adequate gross margin, a company will be unable to pay its operating and other expenses and build for the future. In general, a company's gross profit margin should be stable...
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Financial Ratios Profitability ratios: measure the capacity to preserve the income equilibrium in the future... Financial strength ratios: measure the reliance of the firm on long-term risk capital Liquidity ratios: measure (short/long-term) solvency, i.e. the capacity for the company to pay bills as they arrive. Profitability Notes: Should be compared with a relevant time period Profitability should be assessed either: 1. Cross-sectional. E.g. compared to competitors/its market. 2. Time-series...
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QUESTION 1 i. Current Ratio = Current Assets/Current Liability = $ 14,651,000/$ 19,639,000 = 0.750 ii. Quick Ratio... = (Current Assets – Inventory) / Current Liability = ($ 14,651,000 – $ 6,136,000) / $ 19,539,000 = 0.436 iii. Total Assets Turnover = Sales/Total Assets = $ 167,310,000/$ 108,615,000 = 1.540 iv. Inventory Turnover = COGS/Inventory = $ 117,910,000/$ 6,136,000 = 19.216 v. Receivable Turnover = Sales/Account Receivables = $ 167,310,000/$ 5,473...
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A financial ratio is a simple mathematical... comparison of two or more entries from a company's financial statements. Business owners and managers use ratios to chart a company's progress, uncover trends and point to potential problem areas in a business Financial ratios are relationships determined from a company's financial information and used for comparison purposes. Examples include such often referred to measures...
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important financial ratios to give a pitcure of its financial position in the market comparing by comaparing it to... its industry average. From Annual report of year 2011 of ITV Plc . Financial Performance Analysis: This section aims to reflect the financial performance of the ITV Plc by analysing a range of financial ratios from the last two years. A comprehensive evaluation is provided of the significant ratios and later it is compared with its peers and sector ratios. Liquidity Ratios Basically...
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Tootsie Roll Net Profit Margin: Earnings Before Tax (EBT) – Taxes/Net Product Sales OR Net income/Sales Net Profit Margin is a ratio of... profitability that measures how much out of every dollar of sales a company actually keeps in earnings. A higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors. 43938/528369 = 8.32% This is above industry average of 7.23%. Tootsie Roll’s profit margin is 8.32%, meaning the company has a...
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Session 15: Limitation of Ratio Analysis Learning Objective Explain to the participants on the limitation of... ratio analysis. Important Termss Creative accounting. Accounting Policies. Limitations of Ratios Accounting Information Different Accounting Policies The choices of accounting policies may distort inter company comparisons. Example IAS 16 allows valuation of assets to be based on either revalued amount or at depreciated historical cost. The business may opt not to revalue...
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Interpreting Financial Results FIN/571 July 22, 2013 Interpreting Financial Results Liquidity: Current... Ratio Parrino, Kidwell, & Bates (2012) detail the current ratio as current assets divided by liabilities. The current ratio identifies a firm’s potential to pay short-term liabilities; higher liquidity is a good sign for potential creditors (Parrino et al., 2012). At the same time, however, the current ratio should not greatly exceed benchmarks of other competitors (Parrino et al., 2012)...
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Introduction Financial ratio analysis is important to a business’s success. A financial ratio... analysis is an indicator of a company’s financial performance. It helps a business compare company financials with previous periods and also allows a business to contrast its financials to similar companies. A financial ratio can provide a clear image of a company's state and identify trends that are emerging. Use of ratios in analyzing financial statements Ratio analysis is a form of financial analysis...
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COMMON FINANCIAL RATIOS 1 Current Ratio Current Ratio = Current... Asset/ Current Liability 2011 2012 2747.2/3087.1 4230.6/4869.6 0.0897 0.8687 ------------------------------------------------- INTERPRETATION In 2011 the current ratio is 0.0897 which means company has not enough resources to pay its debt over the next business cycle (usually 12 months) by comparing firm's current assets to its current liabilities...
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Analyzing Financial Information Using Ratios A resource article by Kate Barr, executive director, Nonprofits Assistance Fund... _____________________________________________________________________________________ Leaders of nonprofits who seek to understand the organization’s financial situation usually start by reviewing the financial reports. Understanding the financial information is the building block of any financial discussion. Beyond understanding the reports, much can be learned from analysis...
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Manufacturing’s Financial Ratios Riordan Manufacturing, Inc. (Riordan) is a publically held corporation established in... 1992, specializing in the manufacturing of plastic injection molding with facilities in California, Michigan, Georgia, and China. In 2000, the company expanded the manufacturing operations to China. Financial reports (Appendix A and B) for the fiscal years 2004 and 2005 depict the financial position of the company. Ratios calculated from Riordan’s financial statements provide...
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Running head: RIORDAN MANUFACTURING’S FINANCIAL RATIOS Riordan Manufacturing’s Financial Ratios... University of Phoenix Riordan Manufacturing’s Financial Ratios Riordan Manufacturing, a global plastics manufacturer was founded by Dr. Riordan in 1991. Today the corporation has expanded from the fan manufacturing plant in Michigan into a manufacturer employing 550 people with projected annual earnings of $46 million. Riordan’s has facilities located in America and China and the major customers...
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Important Financial Ratios in Investment Analysis Introduction Financial ratios are derived... ratio numbers from the financial statements of a company. Depending on the task, financial ratios can serve to various purposes in accounting, legal, M&A uses, etc. For investors, financial ratios are very powerful in two ways: indentifying the company’s unique competitiveness and evaluating its stock price level. The first part helps investor find a truly valuable company and the second part helps investor...
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Ford Financial Ratio XXXXXXXXXX FIN/571 10/05/2015 Kenneth Baker Ford Financial Ratio In 2013... Ford delivers strong financial results achieving 18 straights quarters of operating profits and its fourth year in a row of positive net income. Ford had sales revenue of $146 billion in 2013 which was a $13.3 billion dollar increase from 2012 and reported net income after tax of $7.1 billion dollars which was an increase of $1.5 billion dollars from 2012.This resulted in earnings per share of $1...
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The company that I have selected for Financial Ratio analysis is GOOGLE. The Ratios that I am going to analyze are... grouped under four main headings: 1) Profitability Ratio 2) Liquidity Ratio 3) Debt Ratio 4) Market Ratio 1. Profitability Ratio - Profitability ratios measure the firm's use of its assets and control of its expenses to generate an acceptable rate of return. a. ROE - Return On Equity - Measures the rate of return on the ownership interest (shareholders' equity) of the common stock...
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Financial Ratio Analysis Paper Financial Ratio Analysis (Fiscal year of 2009 and 2010)... Liquidity of the agency Current ratios=current assets (cash+accounts receivable+inventory)current liability Current ratios (2009) = (9690+25391) / (6027+8399) = 2.43 Current ratios (2010) = (15799+10123+60333+32119) / (24813+5459) = 3.91 The two ratios show that in the fiscal year of 2009, for every dollar the agency owed, it had 2.43 dollars to pay. In the fiscal year of 2010, the liquidity got...
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A Financial Ratio Quarterly Trend Analysis of Honda Motor Co Ltd Stock Symbol: HMC Listed on the New York Stock... Exchange Prepared for: Deanne Butchey Department of Finance and Real Estate Florida International University Course: FIN 4606 By: xxxxxxxxxx Recommendations for Investors and Lenders Would you place a personal deposit of one million dollars or more in the publicly traded stock of this company? Honda is considered to be one of the best auto makers in the world;...
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What are the major limitations of Financial Accounting? Explain with the help of Examples. What are the alternatives to overcome... these limitations? Financial accounting can be defined as reporting of the financial position and performance of a firm through financial statements issued to the external users on a periodic basis. It is a field of finance that treats money as a means of measuring economic performance instead of treating it as a factor of production. It encompasses the entire system...
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BSA/500 Calculate Financial Ratios Riordan Manufacturing’s Calculated Financial Ratio Current... Ratio The current ratio is the measure of the degree to which current assets cover current liabilities. A ratio of more than one suggests that it can pay most of its debts at that point in time. The ability to effectively turn products into cash is a good sign of a company's financial state. Current assets $14,589,092.09 * $14,643,456.43 * Current liabilities $6,974,094 $6,029,696 Current...
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NAME ACC230 Checkpoint # 2 Interpreting Financial Ratios Date... From what I have read and gathered; over the past (3) three years, Luna Lighting financials does have the possibility to expand within the next few years. The companies average collection period on money has decreased in the last three years and is better than industry average. The inventory turnover rate has maintained at steady level and...
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The companies’ financial ratios can be compared with the ratios of other equivalent companies between business... sectors at one point of time. These comparisons provide explanations on the relative financial status and performance of the company compared to the relative performance of its competitors. Comparisons are usually made with other companies in the same business sector and the benchmark is assumed to be the suitable value for a company. The assumption here is for the companies in the same...
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The financial statements of proctor & Gamble can be found in the annual report. But what these numbers really mean can be found by the use of... ratios. In order to give you a more in depth analysis of Proctor & Gamble’s financial position we used several ratios. Activity ratios. These ratios measure whether a company is able to convert account within their balance sheet into cash. Showing us how fast a company can generate into cash and thus sales and ultimately more revenue. We used four ratios...
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marks] Ratio 2014 Calculations Results 2013 Calculations Results 1. Return on Equity (2425 / 78018)x100 3.10% 3752/50319 7.46% 2.... Alternative Return on Assets (6985 / 216899)x100 3.22% (9150 / 198522)x100 4.61% 3. Alternative Profit Margin (6985 / 43014)x100 16.24% (9150 / 59860)x100 15.28% 4. Gross Margin (43014 – 24656) / 43014 42.68% (59860 – 38577) / 59860 35.55 5. Price-Earnings Ratio $0.95 / $0.084 11.31 times $0.98 / $0.068 14.41 times 6. Dividend Payout Ratio ($0...
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Section III: Financial Analysis—Ratio Analysis Profitability Ratios When evaluating the company’s... profitability, we pay attention to the following ratios which are commonly analyzed: Net Profit Margin, Accounts Receivables Turnover, Return on Assets and Return on Equity. From the tables and figures, all the ratios have increased over the past five years except for 2012. This means UPS is overall a healthy company and does a good job at generating profits. Net Profit Margin Ratio It measures...
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liabilities demonstrate sustained increases in operating assets and decreases in operating liabilities. Stock repurchase has been more than doubled since... 2004. This could possibly be because of undervaluation issues or an effort to boost Microsoft's P/E ratio. The large net decrease in cash in 2005 can be entirely attributed to the abnormal jump in common stock cash dividends that year. In '05, Microsoft paid 1400% more in dividends than the yearly average. There is no other significant decrease in any...
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accounting4management.com NP ratio is used to measure the overall profitability and hence it is very useful to proprietors. The... ratio is very useful as if the net profit is not sufficient, the firm shall not be able to achieve a satisfactory return on its investment. This ratio also indicates the firm's capacity to face adverse economic conditions such as price competition, low demand, etc. Obviously, higher the ratio the better is the profitability. But while interpreting the ratio it should be kept in...
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rival have a better strategy than the others? Does one rival have a somewhat weaker strategy than the other two? 3. Which of the three warehouse club rivals... has been the strongest financial performer in recent years? Support your answer with calculations based on the data in case Exhibits 2, 6, and 7. Use the financial ratios presented in Table 4.1 of Chapter 4 to help you with the needed number crunching. 4. Does the data in case Exhibit 5 indicate that Costco’s expansion outside North America (the...
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FINANCIAL RATIO ANALYSIS REPORT The fiscal year 2004 was a relatively soft year for Barnes & Noble, Incorporated (B&N).... Blockbuster nonfiction books that came out during the year may not have come from the company, but business remained strong. This is due to the million of books already in the market, including phenomenal fiction hits "The Da Vinci Code," "The Five People You Meet in Heaven," and "The Rule of Four," and thousands of new releases during the year. This claim was supported by the...
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the firm’s 2009 financial ratios, and then fill in the preceding table. |Ratio... |Actual 2007 |Actual 2008 |Actual |Industry average | | | | |2009 |2009 | |Current ratio |1.7 |1.8 |2.48 |1.5 | |Quick ratio ...
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Financial Ratios and Health Care Organizations Monique Thomas MHA 612 Financial and Managerial Accounting... Instructor Stacy Hiles September 10, 2012 Financial Ratios and Healthcare Organizations Health systems routinely compare their financial results to those of a peer group of healthy competitors. Although managers of most organizations strive to achieve the outcomes of comparable healthy competitors, it is equally important to examine those of unhealthy competitors. By doing so, managers...
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Ratio Analysis Ratio analysis is one of the techniques of financial analysis where ratios are... used as a yardstick for evaluating the financial condition and performance of a firm. Analysis and interpretation of various accounting ratios gives skilled and experienced analyst a better understanding of the financial condition and performance of the firm than what he could have obtained only through a perusal of financial statements. Types of ratio’s 1. Profitability ratio 2. Leverage ratio...
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Toyota Motor Corporation. The Group's principal activities are to manufacture and sell automobiles and provide financial services. The Group... operates through three segments: Automotive, Financial Services and Other. Automotive segment designs, manufactures, assembles and sells passenger cars, recreational and sport-utility vehicles, minivans and trucks and related parts and accessories. Financial services segment provides financing to dealers and their customers for the purchase or lease of Toyota vehicles...
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The Industry Averages and Financial Ratios Cassandra Brown, Diana Smiley, Patricia Ramirez FIN/370 - FINANCE FOR BUSINESS... 11/23/14 Michael Rodriguez The Industry Averages and Financial Ratios In today’s market business really look at what the others in their competitive market are doing to compare how they are doing as a business or corporation. They do this by evaluating the industry averages and the financial ratios. When corporations and financial advisors look at the industry...
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return on asset ratios for Landry's, the firm invested less money in 2003 in its asset base than it invested in 2002. Current... Ratio (Current Ratio = Current Assets / Current Liabilities) Liquidity ratios, like the current ratio, provide information about a firm's ability to meet its short time financial obligations. Short-term creditors seek a high current ratio from prospective clients since it reduces their risk. For investors in a company, such as shareholders, a lower ratio is sought, so...
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Ratio analysis Debt ratio Debt ratio (2006-2007) = Total liabilities / Total assets = 10,170/12,064 = 0.84 Debt... ratio (2007-2008) = 9,210/11,769 = Debt ratio (2008-2009) = 10,003/11,229 = Debt ratio (2009-2010) = 11,043/12,537 = Current ratio Current ratio (2006-2007) = Current assets / Current liabilities = 3,424/4,790 = 0.71 Current ratio (2007-2008) = 2,164/4,498 = Current ratio (2008-2009) = 1,326/5,389 = Current ratio (2009-2010) = 2,697/6,085 = Return on sales (ROS) Return on Sales...
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Ratio Analysis Ratio analysis is basically used to understanding the financial health of a business entity. With... the help of ratios we can easily calculate from current year performance of the companies and are then compared to previous years. Ratio analysis conducts a quantitative analysis of information in a company’s financial statements. These Ratios are most commonly used in banking sector can be divided into five main categories Liquidity Ratios Leverage Ratios Profitability Ratios Activity...
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A well formulated financial ratio analysis report helps investors to quantify a company’s financial strengths and... weaknesses and potential risks and opportunities and identify the company’s financial position. Using financial ratio analysis as a tool in conjunction with other business evaluation processes, and other company factors, is beneficial for the investors (Brealey, Meyers & Marcus, 2009). The following report will provide the investor with a clear picture of the company’s current status...
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Ratio analysis provides an indication of a company's liquidity, gearing and solvency. But ratios do not provide answers; they are... merely a guide for management and others to the areas of a company's weaknesses and strengths (Palat 1999). However, ratio analysis is difficult and there are many limitations. This section will identify and discuss the inadequacies of accounting ratios as tools of financial analysis. ACCOUNTING POLICIES. It is difficult to use ratios to compare companies, because they...
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NIKE, INC.: Executive Summary Financial Statement Ratios According to Nike’s SIC number (3021), the company is classified in... the “rubber and plastic footwear” industry. Relying upon this information Mergent Online identified the following American companies as competitors to Nike: • Columbia Sportswear Company Annual Revenue $ 1,483,524,000 • Deckers Outdoor Corporation Annual Revenue $ 1,000,989,000 • Crocs, Inc. Annual Revenue $ 789,695,000 • Bakers Footwear Group Annual...
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8, 2008 at Midnight Each question is worth 3.33 points 1. Financial statement ratios support informed judgments and decision... making most effectively: a. when viewed for a single year. b. When viewed as a trend of entity data. c. When compared to an industry average for the most recent year. d. When the trend of entity data is compared to the trend of industry data. 2. When comparing entity financial ratios with industry ratios: a. it should be assumed that the data result from the consistent...
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Financial Ratio Analysis Return on Equity (ROE) ROE measures the profitability of a company, it shows how much of profit can be... generated by each dollar of common stockholders’ equity. The higher the value of ROE means that the company is generating income efficiently. The net benefit that shareholders’ are receiving from investing their capital in the financial firm can be estimated by ROE. Usually, investors will compare and check the trend of ROE of different companies to make sure investment...
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UVA-C-2332 Rev. Oct. 17, 2012 RATIOS TELL A STORY—2011 Financial results and conditions vary among companies for a number... of reasons. One reason for the variation can be traced to the characteristics of the industries in which companies operate. For example, some industries require large investments in property, plant, and equipment (PP&E), while others require very little. In some industries, the competitive productpricing structure permits companies to earn significant profits per sales...
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MEANING OF ACCOUNTING: Accounting is the process of recording, classifying, summarizing, analyzing and interpreting the financial... transactions of the business for the benefit of management and those parties who are interested in business such as shareholders, creditors, bankers, customers, employees and government. Thus, it is concerned with financial reporting and decision making aspects of the business. The American Institute of Certified Public Accountants Committee on Terminology proposed...
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Contents page Introduction……………………page1 Literature review………………page 2 Uses of ratios…………………...Page 2 Types of... financial ratios………Page 3 ➢ Profitability ratios……….Page 3 ➢ Efficiency Ratios………....Page 4 ➢ Liquidity Ratios………….Page 5 ➢ Investment Ratios………..Page 6 Limitations of ratios…………..Page 8 Conclusion……………………..Page 8 Introduction. The primary purpose of accounting is to convey information about the business to management, investors, shareholders, government...
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advantage of Monsanto 4.To rationalize and analyze case of an existing company Objective of the case/ problem: To transform the company into a life... sciences behemoth. Alternative courses of action: 1.To merge with companies having strong financial resources 2.To have interrelationships 3.Acquisitions Analytical tools employed: 1.SWOT (Strength, Weaknesses, Opportunities and Threats) Analysis 2.Porter's Five Force Analysis Recommendation: Monsanto's swelling new product pipelines...
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positive answer indicates late payments, while a negative answer indicates early payments. 4. Pie Corp's sales last year were $315,000, and its... year-end total assets were $355,000. The average firm in the industry has a total assets turnover ratio (TATO) of 2.4. The firm's new CFO believes the firm has excess assets that can be sold so as to bring the TATO down to the industry average without affecting sales. By how much must the assets be reduced to bring the TATO to the industry average...
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Year III ------------------------------------------------- Ratio Analysis Report -------------------------------------------------... Student: Kevin Galea 205891 (M) ------------------------------------------------- Lecturer: Dr. Emanuel Camilleri Introduction The purpose of the following report is to aid Build-It Ltd in planning the direction that the company may want to go over the next few years. The report entails a financial analysis which will give the directors an understanding of how...
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in manufacturing facilities located throughout the United States, Canada, Mexico and Europe. The company's financial ratios for... 2004, 2005, and 2006 were analyzed and indicates that the company is not without problems. The current ratio for the company has been on a steady decline over the last three years. From the standpoint of a creditor, the reduction of the company's current ratio is not good as the company's short term liabilities is outgrowing its current assets. However, when you look...
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Profitability Ratios 4 Liquidity Ratios 5 Gearing Ratios 5 Investment Ratios 6 Performance... Factors 6 Kingfisher PLC 7 Home Retail Group 7 Appendix 8 Profitability Ratios 8 Liquidity Ratios 9 Gearing Ratios 9 Investment Ratios 10 Bibliography 11 Introduction The aims and objectives of this report are to compare the two companies, Kingfisher Plc. and Home Retail Group Plc., using their annual report published for the year 2011. With the help of the financial statements, it...
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Financial statements, also known as financial reports, record the financial activities of a business in short and... long term. The four financial statements are: balance sheet, income statement, statement of retained earnings, and statement of cash flows. A balance sheet reports the assets, liabilities, and net equity on a company. An income statement reports income, expenses, and profits on a company. A statement of retained earnings shows a company's changed retained earnings. The statement...
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