ANALYSIS OF FINANCIAL STATEMENTS Financial statement analysis is the study of relationships between the elements of the same statement or different financial statements and the trend of these elements. The purpose of financial statement analysis is to determine the meaning and significance of the data contained in the statements so that a forecast may be made of the prospects for future earnings‚ expected dividends and the ability of the business to pay interest and debt as it matures. Financial
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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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industries. About 27% of the foreign exchange earnings are on account of export of textiles and clothing alone. The textiles and clothing sector contributes about 14% to the industrial production and 3% to the gross domestic product of the country. Around 8% of the total excise revenue collection is contributed by the textile industry. So much so‚ the textile industry accounts for as large as 21% of the total employment generated in the economy.
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Financial Reporting II Review of Ratio Analysis Ratio analysis is a useful tool for analyzing financial statements. Calculating ratios will aid in understanding the company’s strategy and in understanding its strengths and weaknesses relative to other companies and over time. They can sometimes be useful in identifying earnings management and in understanding the effect of accounting choices on the firm’s reported profitability and growth. Finally‚ the ratios help in obtaining a better understanding
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Introduction to the companies. Cargills (Ceylon) PLC Cargills is Sri Lanka’s largest modern retailer. Its pioneer venture into modern trade was an innovation of the company’s trading legacy. Thereafter Cargills Food City continued to challenge the norm by taking to the masses what was traditionally an affluent focused business and offering ‘higher value for the lowest price’. Today the Cargills retail operation is spread across the island as ‘Cargills Food City’ supermarkets and ‘Cargills
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operating models‚ remuneration practices‚ employment regulations and taxation policy. The report also includes a review of academic studies on private equity transactions from around the world. The findings from these studies‚ which are woven into the analysis‚ show not only what we currently know about the impact of private equity on the
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INTERPRETATION OF FINANCIAL STATEMENTS Ways of interpreting financial statements - Using individual items contained in financial statement. - Using ratios computed from items contained in Financial Statement (Ratio analysis) Reasons for interpreting accounts Accounts have to be analyzed and interpreted for the following logical points (1) Evaluation of the trading performance of a firm in order to have a measure of the quality of management running it. (2) Appraisal and monitoring
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examine the current state of health and disease‚ health care’s laws and ethics‚ the psychology of health‚ and financial operations of the health care system. Nine weeks in length‚ courses are offered in pairs‚ or “blocks‚” designed to complement each other. In these courses‚ emphasis alternates weekly between reading and online discussion one week and a work project the next. The completion of an Associate of Arts degree represents an important milestone for many students as they pursue their educational
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Ratio Analysis Formulas 1) Financial ratios S.no | Ratio | Formula | Ideal ratio | comments | 1 | Current ratio | Current assetsCurrent liabilities | 2:1/1.33:1 | Indicates firm’s commitment to meet financial obligations.Avery heavy ratio is not desirable as it indicates less efficient use of funds | 2 | Quick ratio | Quick assetsCurrent liabilities | 1:1 | This ratio also indicates short term solvency of a firm | 3 | Debt –Equity ratios | long term debtequity | 1:2 | Indicates long
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CLASSIFICATION OF RATIO ANALYSIS "Ratios" can be grouped into various classes according to "financial" activity or function to be evaluated. In view of the requirements of the various users of "ratios"‚ we can classify then into the following categories. Liquidity "Ratios" Profitability "Ratios" Solvency "Ratios" "Financial" statement "analysis" is a judgemental process. One of the primary objectives is identification of major changes in trends and relationships and the investigation of the
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