METHODIST UNIVERSITY COLLEGE GHANA FACULTY OF BUSINESS ADMINISTRATION LEVEL 300 FINANCIAL ACCOUNTING IV RATIO ANALYSIS OF FML UN-AUDITED ACCOUNTS OF 2010 AND 2011 Name Index No Programme 1. Osumanu-Sulemana Amidu BBAA/ET/123001 Accounting 2. Emmanuel Addae BBAA/ET/ 117726 Accounting 3. Benedicta Mawunu
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RATIO ANALYSIS Ratio analysis is a key dimension of financial management‚ suggesting a relationship between profit and loss as mentioned in the balance sheet of an organization. In Latin ‘ratio’ means reason. In English ‘ratio’ means relationship. Ratio analysis is defined as “the establishment of a reasoned relationship” of a fixed variable character between measurements of certain phenomenon having some kind of linkage. A ratio shows the arithmetical relationship between two figures
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* Findings and Analysis: Liquidity Ratio 1. Current Ratio: A company’s current assets divided by its current liabilities is known as the Current Ratio. This ratio is regarded as a measure of short-term debt paying ability. It measures the capability to obsolete the current liability with comparing to current asset by how many times. The equation is- Current Ratio = Current AssetCurrent Liability * The general rule of thumb calls for a current ratio of at least 2:1. If it is greater than
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2009 FIANANCIAL STATEMENT ANALYSIS BEXIMCO PHARMA ASSIGNMENT ON Financial Report & Ratio Analysis CURSE NAME: Financial Accounting Course Code: ACT (142) Program: BBA Submitted BY Md. Akther Sayed Id No: 10510508 Bachelor of Business Administration Submitted TO Farhana Rohman Course Instructor of Financial Accounting Department of Business Administration Submission Date 29th December‚ 2010
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Ratio analysis 1. Liquidity ratio The liquidity ratios measure the company’s ability to meet its short-term debt obligations (Intermediate accounting- Kieso‚ D.E.‚ J.J. Weygandt and T.D. Warfield). These ratios include current ratios‚ quick ratios‚ and cash ratio. Current ratio: the current ratio of GM has increased from 1.29 in 2012 to 1.30 in 2013. With a higher ratio in 2013‚ it’s better for GM to meet its short-term obligation. Quick ratio: the quick ratio of GM has improved from 0.79 in 2012
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LIQUIDITY Liquidity ratios are used to determine a company’s ability to meet its short-term debt obligations. Investors often take a close look at liquidity ratios when performing fundamental analysis on a firm. Since a company that is consistently having trouble meeting its short-term debt is at a higher risk of bankruptcy‚ liquidity ratios are a good measure of whether a company will be able to comfortably continue as a going concern. Working Capital Working capital is the amount by which the
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Liquidity Ratio Analysis What It Measures Liquidity ratios are a set of ratios or figures that measure a company’s ability to pay off its short-term debt obligations. This is done by measuring a company’s liquid assets (including those that might easily be converted into cash) against its short-term liabilities. There are a number of different liquidity ratios‚ which each measure slightly different types of assets when calculating the ratio. More conservative measures will exclude assets that
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Costco Wholesale is the seventh largest retailer in the world and in 2006‚ its total sales reached close to $59 billion dollars‚ which came from its 496 warehouse locations operating in the United States‚ Canada‚ Puerto Rico‚ Taiwan‚ Japan‚ Korea‚ Mexico‚ and the United Kingdom (p. 216). This was mainly due to the business and merchandising savvy of Jim Sinegal‚ the CEO and cofounder of Costco. Costco’s mission: “To continually provide our members with quality goods and services at the lowest possible
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Ratio Analysis Ratio Analysis is a form of Financial Statement Analysis that is used to obtain a quick indication of a firm’s financial performance in several key areas. The ratios are categorized as Short-term Solvency Ratios‚ Debt Management Ratios‚ Asset Management Ratios‚ Profitability Ratios‚ and Market Value Ratios. Ratio Analysis as a tool possesses several important features. The data‚ which are provided by financial statements‚ are readily available. The computation of ratios facilitates
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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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