CHAPTER 13 Financial Statement Analysis OVERVIEW OF EXERCISES‚ PROBLEMS‚ AND CASES Estimated Time in Learning Outcomes Exercises Minutes Level 1. Explain the various limitations and considerations in financial statement analysis. 2. Use comparative financial statements to analyze a company 12* 45 Mod over time (horizontal analysis). 13* 30 Mod 3. Use common-size financial statements to compare various 12* 45 Mod financial statement items (vertical analysis)
Premium Balance sheet Financial ratios Generally Accepted Accounting Principles
possibility that it booked imaginary sales and account receivables. As a result‚ its stock price has drastically dropped from $242.14 to $35.16 as of April 30‚ 2016 (Figure 1). Issues Valeant was involved in an investigation because it inflated the price for drugs‚ such as flucytosine and Glumezta. This action is called market manipulation. Market manipulation
Premium Marketing Canada United States
The Solution ZERO INVENTORIES: Typically industries that provide a service. • Advertising Agency: E o High receivable collection in days is indicative of advertising consulting firms i.e. projects are worked on and work is billed only after the work has been completed. In this case‚ ad campaigns are produced and run after which advertising firms then charge for services rendered. (CR) o A large portion of their liabilities is devoted to accounts payable simply due to pending payments to various
Premium Accounts receivable Balance sheet Chain store
Inventory turnover Generally‚ the larger the inventory turnover the more efficient and effective the company is managing inventory. (AT&T) The accounts receivable turnover measures how frequently during the year the accounts receivable are being converted to cash. A high ratio implies either that a company operates on a cash basis or that its extension of credit and collection of accounts receivable is efficient. A low ratio implies the company should re-assess its credit policies
Premium Balance sheet Financial ratios Asset
Company Analysis Report Company name & registered office This company analysis report is going to give detailed information about CSL Limited and also provide the analysis of the financial status of the company. The address of registered office for CSL Limited is 45 Popular Road‚ Parkville‚ Victoria 3052‚ Australia. (CSL annual report 2011‚ p.130). Company information CSL is a global specialty biopharmaceutical company that produces life-saving and life-enhancing medicines that enable many thousands
Premium Balance sheet Generally Accepted Accounting Principles Revenue
Capital Ratio: ......................................................................................... 6 Asset Turnover Ratio:............................................................................................................ 7 Long Term Assets Turnover.................................................................................................. 7 Accounts Receivables Analysis:
Premium Balance sheet Inventory Asset
its assets efficiently and to generate sales. These assets include fixed assets like plants and equipment as well as inventory‚ accounts receivable as well as any other current assets. The lower the total asset turnover ratio‚ the lower the businesses total sales. If there is a problem with any component of the company’s assets‚ whether inventory‚ receivables or fixed assets‚ it will be indicated in this equation. In FY 2011 Starbucks© generated a total revenue of $11‚700.4 million in sales
Premium Balance sheet Generally Accepted Accounting Principles Asset
of the business is good. Revenues have increased on average 10% each year from 2002 to 2005. However during this time cash balances have decreased. Accounts receivable and inventory have increased in the same time span. Cash has decreased from $120.1 to $9.4‚ a decline of 92% over the four year time span. In the same period Accounts Receivable went from $90.6 in 2002 to $146.4 in 2005‚ an increase of 62%. Likewise‚ inventory has increased from $468.3 to $656.9‚ an increase of 40%. We do know that
Premium
a stand-alone basis. Important Categories of Financial Ratios For the investment process‚ we can group financial ratios into the following categories: Liquidity — how capable is the company in meeting its short-term debt obligations? Asset Turnover — how efficiently does the company use its assets? Leverage — what is the company’s debt load like compared to its net worth? Operating Performance/Profitability — how well is the company utilizing its resources to make profits and create shareholder
Premium Financial ratios Financial ratio Generally Accepted Accounting Principles
Ratio Analysis & Time Series Analysis Of 2.1 Ratio and time series analysis of Beximco Pharmaceutical 1. Inventory turnover: A ratio showing how many times a company’s inventory is sold and replaced over a period. Formula: Inventory Turnover =Cost of goods sold/Average Inventory. The ratio and time series analysis of Inventory Turnover of Beximco Pharmaceutical from 2008-2012 is given below- Interpretation: The companies ratio increases from 2008 to 2010‚ then decreases
Premium Financial ratios Financial ratio Generally Accepted Accounting Principles