reported on the financial statements. 1) Return on Equity: One of the most important profitability ratios is return on equity (ROE). ROE is the amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested. The return on equity ratio is computed as follows: Return on Equity = | Net Income | | Average Shareholder’s Equity | Simply
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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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The Golden Ratio Body‚ art‚ music‚ architecture‚ nature – all connected by a simple irrational number – the Golden Ratio. According to Posamentier & Lehmann in their work The (Fabulous) Fibonacci Numbers‚ there is reason to believe that the letter φ (phi) was used because it is the first letter of the name of the celebrated Greek sculptor Phidias (490-430 BCE). He produced the famous statue of Zeus in the Temple of Olympia and supervised the construction of the Parthenon in Athens
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the Golden Ratio The golden ration can occur anywhere. The golden proportion is the ratio of the shorter length to the longer length which equals the ratio of the longer length to the sum of both lengths. The golden ratio is a term used to describe proportioning in a piece. In a work of art or architecture‚ if one maintained a ratio of small elements to larger elements that was the same as the ratio of larger elements to the whole‚ the end result was pleasing to the eye. The ratio for length
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The financial ratios are: Liquidity Ratio- The firms ability to satisfy the short term obligations. (Gitman‚ 2007) Activity ratio- That measure the speed with which various accounts are converted into sales or cash‚ inflows or outflows. (Gitman‚ 2007) Debt ratio- That measures the proportion of total assets financed by the firms creditors. (Gitman‚ 2007) Profitability ratio- measures enable the analyst to evaluate the firms profits with respect to a given level of sales a certain level of assets
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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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expense a good indicator of the cost of using those buildings and equipment? Compare that situation to a company with new buildings and equipment where there will be large amounts of depreciation expense. The remainder of our explanation of financial ratios and financial statement analysis will use information from the following income statement: Example Corporation Income Statement For the year ended December 31‚ 2011 | | Sales (all on credit) | $500‚000 | Cost of Goods Sold | 380
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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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ABSTRACT: In contrast to other major textile-producing countries‚ mostly mostly small-scale‚ nonintegrated spinning‚ weaving‚ cloth finishing‚ and apparel enterprises‚ many of which use outdated technology‚ characterize India’s textile sector. Some‚ mostly larger‚ firms operate in the “organized” sector where firms must comply with numerous government labor and tax regulations. Most firms‚ however‚ operate in the small-scale “unorganized” sector where regulations are less stringent and
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parmar on “Financial Efficiency-Modern methods‚ tools & Techniques” for the period from 1998-89 to 1994-95.He had made an attempt to analyze financial strength‚ liquidity‚ profitability‚ cost and sales trend and social welfare trend by using various ratios analysis‚ common size analysis and value added analysis. He made several suggestions for the improvement of profitability
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