Nobody downloaded yet

Financial Statement Analysis - Assignment Example

Comments (0) Cite this document
Summary
That may be an indication that in 2007, the firm generates more profits than in 2010 (Fridson and Alvarez, 2011).
The company’s return on assets and return on capital…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER96.7% of users find it useful
Financial Statement Analysis
Read TextPreview

Extract of sample "Financial Statement Analysis"

Download file to see previous pages That indicates that the company was more liquid in 2010 than in 2007. Therefore, the company was in a better position to meet its obligations in 2010 as compared to 2007.
From the ratios, it is evident that the company performed better in 2007 than 2010. The only area in which it performed better in 2010 is in liquidity ratios. That indicates that resource utilization was better in 2007 as compared to 2010 (Piper, 2013, p.53). The cost and expenses may have contributed to the differences in the ratios. Minimizing costs and expenses would act to rectify the trend and ensure the profitability improves in the future. The effect of the expenses is evident as the ratio of the selling, general and administrative expenses to sales is higher in 2010 than in 2007. The ratio is 0.147 and 0.141 respectively. Reducing the expenses would increase the profit and income for the company. That would increase profitability over the years (Brigham and Ehrhardt, 2013, p.107).
The asset turnover ratios are higher in 2007 than in 2010. The only turnover ratio that is higher in 2010 than 2007 is the property, plant and equipment turnover ratio. That indicates that the company is able to generate more sales from its assets in 2007 than in 2010. An improvement in this statistic may be possible if the company achieves more sales given the increasing assets over the years. The increased sales would improve the turnover ratios and result in an increase in profitability (Kimmel, Weygandt, and Kieso, 2012, p.689). The Operating Profit influences the Return on Capital Employed (ROCE) to a large extent. The operating profit in 2010 is lower than in 2007. That, coupled with the higher operating capital in 2010, gives a lower return on capital compared to that of 2007.
In all aspects, profitability has a huge impact on the Return on Capital Employed (ROCE) of the company. A falling ROCE may be an indication of the company’s falling competitive advantage. An ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Financial Statement Analysis Assignment Example | Topics and Well Written Essays - 750 words”, n.d.)
Retrieved from https://studentshare.org/finance-accounting/1690602-financial-statement-analysis
(Financial Statement Analysis Assignment Example | Topics and Well Written Essays - 750 Words)
https://studentshare.org/finance-accounting/1690602-financial-statement-analysis.
“Financial Statement Analysis Assignment Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.org/finance-accounting/1690602-financial-statement-analysis.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Financial Statement Analysis

Financial Statement Analysis

... popular due to provision of the best product and services in the mobile industry such as the blackberry service and the low off peak rates for the international calls. The following report is intended to analyze the major aspects which has made du company grow in such a high rate, it will be based on the strength of the company and also the financial statement will be analyzed in order to predict the future performance of the business. The analysis can therefore be helpful to potential investors since all the important aspects will be covered. To date du company has shown a continuous growth and increase in value give that by the year 2011 they were able to serve d more than 46% of the UAE mobile market this is in accordance... expansion...
14 Pages(3500 words)Research Paper

Financial statement analysis

...? FINANCIAL MENT ANALYSIS A4M1 Supplies is a public company which is engaged in the business of manufacturing and supplying of different electrical components. This study is about the financial ratio analysis of the company for the years 2011 and 2012. The ratio analysis has been performed with the help of the financial information present in the company’s financial statements. Different types of ratios have been calculated and divided into three categories, namely, liquidity ratios, activity ratios and profitability ratios. The liquidity ratios calculated for the company indicate that the company was able to generate more ash revenues in the year 2012 as compared to 2011, and this resulted in improvement in its liquidity position... ...
7 Pages(1750 words)Essay

Financial statement analysis

...? The table below illustrates a ratio analysis for two companies: Happy Hospital and St Agnes Hospital. Happy Hospital St. Agnes Hospital Current Ratio 2.89 n/a Quick Ratio 2.63 n/a Net Margin 6.49% 11.56% Asset Utilization 63.56% n/a Financial Leverage 10.22% 86.40% The current ratio of Happy Hospital was 2.89 and its quick ratio was 2.63. The current ratio reveals whether a company is capable of paying its short term debt. The quick ratio has the same objective, but the measure is more sensitive since it subtracts inventory from the numerator of the formula leaving the most liquid assets available to pay the debt. The general rule is for a current ratio to be good it must be above 1.0. Both the current ratio and quick ratio... in the...
2 Pages(500 words)Essay

Financial Statement Analysis Project

...of the financial condition of the company. Though no changes in the cash flow can be witnessed yet deviation in the cash flow statement can occur. All the lease payments related to the company will be shown under the financial activities of the company thus disrupting the proper accounting procedures. Thus in my opinion the operating lease accounting though at a discounted value should not be implanted in the main financial statements of the company as it is a mirror view for the analysts to assess the present financial health of the company along with the deviations undertaken, so much so, that the company can take corrective measures...
8 Pages(2000 words)Research Paper

Financial statement analysis

...). Practical financial management. Mason, OH: Thomson South-Western. Millennium Hotel and Resort (2013). “Corporate Information” Retrieved ;< http://www.millenniumhotels.com/ on 15th March 2013. Robinson, T. R. (2012). International financial statement analysis. Hoboken, N.J: John Wiley & Sons. Vasigh, B., Fleming, K., & Mackay, L. (2010). Foundations of airline finance: Methodology and practice. Farham, Surrey: Ashgate Pub. Warren, C. S., Reeve, J. M., Duchac, J. E., & Warren, C. S. (2012). Financial and managerial accounting. Mason, Ohio: South-Western Cengage Learning.... ? Financial ment analysis Lecturer: Introduction/companies over view Intercontinental Hotel Group is a public limited company with its...
6 Pages(1500 words)Assignment

Financial Statement Analysis

...Quick Ratio = 436,192 / 2,519,320 = 0.173 times Significance of Current Ratio and Quick Ratio: The current ratio is a reflection of the financial strength of a company. It is the number of times a company's current assets exceed its current liabilities, which is one of the indications of solvency of that business. It measures the ability of the business to pay its current liabilities. The current ratio also shows the short-term financial position of the business. A common rule of thumb is that an ideal current ratio is 2 to 1, that is, current assets must be twice the current liabilities. For instance, AutoZone has a current ratio of 1.03 times as compared to its competitors Advance Auto Parts...
2 Pages(500 words)Case Study

FINANCIAL STATEMENT ANALYSIS

..., Henley shirts, outer wear and swimwear are some constituents of AEO’s most popular products. The first store to be opened globally was in Middle East in Dubai. (c) Financial Statement Ratios Key Financial Statement Ratios Most Recent Year (2011) Prior Year (2010) Industry Average Current Ratio 3.0 2.9 2.4 Accounts Receivable Turnover 305.3 298.2 78.2 Inventory Turnover 6.0 5.4 5.0 Debt to Equity Ratio 0.4 0.4 1.1 Return on Equity 10.4% 10.7% 30.0% Price Earnings Ratio 11.72x n/a n/a (d) Ratio Analysis (i) Current Ratio: The current ratio signifies a company’s ability to pay off its short term obligations that is the ability to cover up short-term...
1 Pages(250 words)Assignment

Financial Statement Analysis

...Financial ment Analysis Discuss why it is just as important to analyze financial ments as it is to prepare them. Financial ments provide information on the financial position of a company. By analyzing them management can avoid taking decisions that would have an adverse impact on the going concern of the company or falling into cash flow traps. For example the Balance sheet provides information on a company’s assets, liabilities and owner’s equity whereas the statement of income provides information on a company’s revenue and expenses. By analyzing them management shall be aware of their company’s strengths, weakness and the limits of...
1 Pages(250 words)Assignment

Financial Statement Analysis

...Financial ment Analysis It is important to determine an organizations financial condition. Such information is crucial in understanding the capacity of a firm to succeed. Particularly, it provides data that are necessary in evaluating whether the enterprise is viable or that whether it has the financial capacity to fulfill its mission or objective. Several types of analyses can explain an organization’s financial condition. Two of the most important of these are financial statement analysis and operating indicator analysis. This paper will explore the former, focusing on its role in...
3 Pages(750 words)Essay

Financial Statement Analysis

...Financial Analysis – A case of Yum! Brands Inc. The analysis of the financial ments of Yum! Brands, Inc. involves several areas such as profitability, capital structure/ leverage/gearing, activity/efficiency and liquidity. These ratios provide important relevant information to the users of the financial statements. They make their decisions based on these ratios. This paper seeks to determine the leverage position, liquidity, profitability and efficiency of Yum! Brands, Inc. Financial Analysis – A Case of Yum! Brands Inc. Analysis of financial statements...
6 Pages(1500 words)Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Assignment on topic Financial Statement Analysis for FREE!

Contact Us