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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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 (Acid
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Methods used to collect data To do this research and analysis project‚ collecting data is essential. The objective of this research is to evaluate company’s performance; therefore most of the data needed must be related to the company. During the evaluation process‚ I have also referred to some academic text and books for some guidance on accounting and business techniques. All data that I gathered for this research and analysis project are secondary data. I have categorised the sources of these
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it’s important that we set our principles to stay on track and motivate ourselves. Therefore we have to respect our rules and follow them in bid to make our goals come true and be successful. In my understanding that’s what principles of Diversity mean and every one of us set them differently. How do you think the principle can affect your goals? Principles are often affecting our goals‚ changing the time of achievement or completely changing the goal itself by changing the circumstances
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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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as a ‘Regional Trading Block’. The World Trade Organisation has deemed these trading blocks as acceptable. The EU is a member of the WTO‚ but to what extent does the EU threaten the main aim of the WTO‚ which is to create a multilateral trading system. The aim of this essay is to compare and contrast the aims of these two international organizations‚ in order to see if these organisations are a hindrance or a help to each other. Each organisation will be discussed in turn looking at their aims and
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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). This could be
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Sen Professor‚ School of Business Independent University‚ Bangladesh (IUB) In Partial Fulfilment of the Requirements of EMBA Course-513E Management Accounting By Mohammed Shamsuddin Student ID: 1110805 Summer Semester‚ 2012‚ Management Accounting‚ EMBA INDEPENDENT UNIVERSITY‚BANGLADESH
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Basic Accounting Concepts and Business Structures Shannon Goshert ACC 537 July 25‚ 2010 Angela Rose Abstract Basic accounting concepts and business structures go hand-in-hand. Usually the business structure will determine the type of accounting concepts it will use. Generally accepted accounting principles (GAAP) are needed for effective accounting information. Basic Accounting Concepts and Business Structures Basic accounting concepts and business structures are important to a business’s
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PROFITABILITY RATIOS One of the most important measures of a company’s success is its profitability. However‚ individual figures shown in the income statement/profit and loss account for gross profit and net profit mean very little by themselves. When these profit figures are expressed as a percentage of sales‚ they are more useful. This percentage can then be compared with those of previous years‚ or with the percentages of other similar companies. Changes in the gross profit percentage ratio can be
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