COMMON-SIZE FINANCIAL STATEMENT ANALYSIS When all the items of a financial statement are expressed on a common basis‚ it is known as a common-size financial statement. Common-sizing of balance sheet is done generally by expressing its all items as a percentage of its total assets or total equities. Similarly‚ income statement is common-sized when its all items are expressed as percentage of total sales. PROCEDURE OF COMMON SIZING In preparing common-size income statement‚ the following procedure
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Common-Size Analysis When comparing financial statements‚ it is often necessary to compare successive years ’ statements of the same company or statements from companies of various sizes. Ordinary financial statements can make it difficult to recognize trends or spot disproportionate categories since the figures make it difficult to tell how much a category has changed in relation to the other categories. Common-size statements solve this problem by valuing all categories in relation to a base
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Common Size Statements are used to compare financial statements of different-size companies‚ or of the same company over different periods. Common-size analysis - (also called vertical analysis) expresses each line item on a single year’s financial statement as a percent. The base amount for the balance sheet is usually total assets (which is the same number as total liabilities plus stockholders’ equity)‚ and for the income statement it is usually net sales or revenues. By comparing two or more
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COMPARATIVE STATEMENT COMMON SIZE STATEMENT AND TREND ANALYSIS INTRODUCTION We know business is mainly concerned with the financial activities. In order to ascertain the financial status of the business every enterprise prepares certain statements‚ known as financial statements. Financial statements are mainly prepared for decision making purpose. But the information as is provided in the financial statements is not adequately helpful in drawing a meaningful conclusion. Thus‚ an effective analysis
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DELL INC. Michael Dell is the founder of Dell Inc. He started his business by simple built-to-order concept selling directly to customers. Later on he started direct sales by mail and phone. Dell is the first company to list a website. The profits dramatically increased when Dell started to sell its products through the website. Dell Effect  collective commitment to our customers‚ direct relationships‚ global citizenship‚ team success and winning. Dell’s aim is to create loyal
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Common-size Income Statement Analysis The common-size income statement shows that Coca-Cola’s cost of goods sold to revenues percentage rose very slightly from 39.14% in 2011 to 39.32% in 2013. At the same time‚ PepsiCo’s cost of goods sold to revenues percentage decreased from 47.51% in 2011 to 47.04% in 2013‚ bringing the 3-year-average to 47.44%. However‚ 47.44% is still much higher than Coca-Cola’s 3-year-average of 39.38%. With lower cost of goods sold to revenues ratio‚ Coca-Cola was able to
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Dell Inc. Identify and evaluate Mission Statement ES# 2-2 Dell‚ Inc. manufactures and markets PC’s. They also offer many other types of products that are marketed towards the private consumer‚ education‚ enterprise‚ and government sectors. The company was created by Michael Dell in 1984 with a mere $1‚000. Instead of using traditional retail channels Dell decided he would make computers made-to-order. By doing this Dell could eliminate a mass of inventory
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Q3: Financing its growth in 1997 (Hint: exhibit-4 and 5) Can be done by using projected financial statements Working Capital requirements Comparison of working capital improvements and profitability improvement Forecast 1997 BS Additional sales of $2648 million imply additional operating assets of $779 million. In 1996‚ the 1997 profits would be $405 million. AFN would be $315- current liabilities may affect AFN For efficient management of working capital: Improve margins Reduce
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HKU575 ALI FARHOOMAND DELL: OVERCOMING ROADBLOCKS TO GROWTH You don’t get a big result if you don’t challenge people with big goals. - Kevin Rollins‚ president and CEO‚ Dell1 In spring 2005‚ Dell‚ Inc. (“Dell”)‚ the world’s largest personal computer (PC) maker‚ announced a new goal: to reach US$80 billion in annual sales by 2009. The goal was fairly ambitious for Dell‚ which at the time had revenues of about US$49 billion.2 In an effort to meet its goals‚ Dell had woven together a broad
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Dell Case Dell is a major player in the computer industry. Michael Dell pioneered the direct selling system that catapulted the firm to the top position in the industry. As the case details‚ controls systems play an important role in Dell’s success. For example‚ the company makes a mere $12 profit on their low end machines that sell for $299. It is important to control assembly and delivery lest these wafer thin margins are reduced even further. However‚ as the case points out‚ Dell’s single-minded
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