lUGS Financial Situation and Statement
Analysis of Financial Statements PowerPoint
Financial analysis is designed to determine the relative strengths and weaknesses of a company
Investors need this information to estimate both future cash flows from the company and the riskiness of those cash flows
Financial Statements
Are used to help predict the company’s future earnings and divi
Financial ratios are designed to show relationships between financial statement accounts
DSO represents the average length of time that a company must wait after making a sale before receiving cash
Fixed Assets Turnover Ratio
Is the ratio of sales to net fixed assets It measures how effectively the firm uses
Quick, or Acid Test, Ratio
Is calculated by deducting inventory from current assets and then dividing the remainder by current liabilities
financial statement analysis framework -回复
financial statement analysis framework -回复问题，并提供具体的例子和分析。
【financial statement analysis framework】Introduction:Financial statement analysis is a crucial process for evaluating the financial health and performance of a company. It helps investors, lenders, and other stakeholders to make informed decisions about investing or lending money to the company. To conduct a comprehensive financial statement analysis, a framework can be used to guide the process. In this article, we will discuss the steps involved in financial statement analysis and provide specific examples and analysis.Step 1: Analyzing the Income StatementThe first step in the financial statement analysis framework is to analyze the income statement. The income statement provides valuable information about a company's revenues, expenses, and profitability. By assessing various components of the incomestatement, we can gain insights into the company's revenue growth, cost structure, and overall profitability.Example: Let's take Company ABC as an example. Company ABC's income statement shows a steady increase in revenue over the past three years. This indicates that the company has been successful in growing its sales. However, upon further analysis, we find that the operating expenses have also increased significantly, resulting in a lower operating income. This suggests that the company may be facing cost challenges and needs to control its expenses to improve profitability.Step 2: Evaluating the Balance SheetThe second step in the financial statement analysis framework is to evaluate the balance sheet. The balance sheet provides information about a company's assets, liabilities, and shareholders' equity. By examining the balance sheet, we can assess the company's liquidity, solvency, and capital structure.Example: Continuing with Company ABC, the balance sheet shows that the company has a high level of debt compared to its equity.This indicates a higher risk of insolvency if the company faces financial difficulties. However, the company also has a significant amount of cash and cash equivalents on hand, which indicates a good level of liquidity. This suggests that while the company may have a higher risk of defaulting on its debt, it has the ability to meet its short-term obligations.Step 3: Analyzing the Cash Flow StatementThe third step in the financial statement analysis framework is to analyze the cash flow statement. The cash flow statement provides information about a company's cash inflows and outflows from its operating, investing, and financing activities. By examining the cash flow statement, we can assess the company's ability to generate cash from its operations, investments, and financing activities.Example: Looking at Company ABC's cash flow statement, we see that the company has a positive operating cash flow, indicating that it generates cash from its core operations. However, the company has been investing heavily in new assets, resulting in negative cash flow from investing activities. This suggests that the company is using its cash to expand its operations and acquire newassets, which may lead to future growth opportunities.Step 4: Conducting Ratio AnalysisThe fourth step in the financial statement analysis framework is to conduct ratio analysis. Ratio analysis involves calculating and analyzing various financial ratios, such as profitability ratios, liquidity ratios, and solvency ratios. These ratios provide insights into the company's financial performance, efficiency, and risk profile.Example: By calculating profitability ratios for Company ABC, we find that the company has a declining profit margin over the years. This indicates that the company's ability to generate profits from its sales is decreasing. Furthermore, by calculating liquidity ratios, we find that the company has a low current ratio, indicating a potential difficulty in meeting its short-term obligations. These findings suggest that investors or lenders should be cautious when considering investing or lending money to Company ABC.Conclusion:Financial statement analysis is a comprehensive process that involves analyzing the income statement, balance sheet, cash flow statement, and conducting ratio analysis. By following a systematic framework, investors, lenders, and stakeholders can gain valuable insights into a company's financial health and performance. The examples and analysis provided in this article demonstrate how each step of the framework can be applied to assess a company's financial position and make informed decisions.。
financial report 和financial statement analysis -回复
financial report 和financial statementanalysis -回复什么是财务报告和财务报表分析。
1. 引言(150字)：财务报告和财务报表分析是财务管理和决策过程中的两个关键概念。
财务报告是描述一个组织的财务状况和业绩的文件。
财务报表分析则是利用这些财务报表数据进行分析和解读，以帮助决策者做出明智的商业决策。
2. 财务报告的重要性(300字)：财务报告是为了满足不同利益相关方的信息需求而准备的。
它提供了有关组织财务状况和业绩的信息，帮助管理层、股东、投资者、债权人和监管机构等对组织的财务状况进行评估。
财务报告通常包括资产负债表、利润表、现金流量表和所有者权益变动表。
这些报表提供了组织的财务数据，用于分析和监控财务绩效。
3. 财务报表分析的意义(400字)：财务报表分析是通过对财务报表数据的解读和比较，评估组织的财务状况和业绩。
对于投资者而言，财务报表分析是投资决策的关键工具。
它可以帮助投资者了解公司的运营状况、盈利能力和风险水平，进而做出是否投资的决策。
对于管理层而言，财务报表分析可以协助他们了解公司的财务绩效，并根据分析结果调整商业战略和运营决策。
财务报表分析可以采取多种方法，包括比率分析、趋势分析和垂直分析等。
比率分析是通过计算和比较不同财务指标之间的关系，评估公司的财务绩效。
这些比率包括盈利能力比率、偿债能力比率、流动性比率和市场价值比率等。
趋势分析则是通过比较多个会计期间的财务数据，发现和评估财务变化的趋势。
垂直分析则是将不同财务指标与相关基准进行比较，用于评估公司在行业中的地位。
财务报表分析提供了一种量化评估公司财务状况和业绩的方法，帮助决策者更好地了解公司的财务风险和潜在机会。
然而，财务报表分析也有其限制。
首先，财务报表本身可能受到潜在偏见和误导。
其次，财务报表分析只提供了过去和当前的数据，对于预测未来的业绩有限。
因此，在进行财务报表分析时，需要综合考虑其他方面的信息，如行业和市场趋势、管理层的实力和公司的竞争优势等。
罗斯公司理财Chap003全英文题库及答案
Chapter 03 Financial Statements Analysis and Long-Term Planning Answer KeyMultiple Choice Questions1. One key reason a long-term financial plan is developed is because:A. the plan determines your financial policy.B. the plan determines your investment policy.C. there are direct connections between achievable corporate growth and the financial policy.D. there is unlimited growth possible in a well-developed financial plan.E. None of the above.Difficulty level: EasyTopic: LONG-TERM PLANNINGType: DEFINITIONS2. Projected future financial statements are called:A. plug statements.B. pro forma statements.C. reconciled statements.D. aggregated statements.E. none of the above.Difficulty level: EasyTopic: PRO FORMA STATEMENTSType: DEFINITIONS3. The percentage of sales method:A. requires that all accounts grow at the same rate.B. separates accounts that vary with sales and those that do not vary with sales.C. allows the analyst to calculate how much financing the firm will need to support the predicted sales level.D. Both A and B.E. Both B and C.Difficulty level: MediumTopic: PERCENTAGE OF SALESType: DEFINITIONS4. A _____ standardizes items on the income statement and balance sheet as a percentage of total sales and total assets, respectively.A. tax reconciliation statementB. statement of standardizationC. statement of cash flowsD. common-base year statementE. common-size statementDifficulty level: EasyTopic: COMMON-SIZE STATEMENTSType: DEFINITIONS5. Relationships determined from a firm's financial information and used for comparison purposes are known as:A. financial ratios.B. comparison statements.C. dimensional analysis.D. scenario analysis.E. solvency analysis.Difficulty level: EasyTopic: FINANCIAL RATIOSType: DEFINITIONS6. Financial ratios that measure a firm's ability to pay its bills over the short run without undue stress are known as _____ ratios.A. asset managementB. long-term solvencyC. short-term solvencyD. profitabilityE. market valueDifficulty level: EasyTopic: SHORT-TERM SOLVENCY RATIOSType: DEFINITIONS7. The current ratio is measured as:A. current assets minus current liabilities.B. current assets divided by current liabilities.C. current liabilities minus inventory, divided by current assets.D. cash on hand divided by current liabilities.E. current liabilities divided by current assets.Difficulty level: EasyTopic: CURRENT RATIOType: DEFINITIONS8. The quick ratio is measured as:A. current assets divided by current liabilities.B. cash on hand plus current liabilities, divided by current assets.C. current liabilities divided by current assets, plus inventory.D. current assets minus inventory, divided by current liabilities.E. current assets minus inventory minus current liabilities.Difficulty level: EasyTopic: QUICK RATIOType: DEFINITIONS9. The cash ratio is measured as:A. current assets divided by current liabilities.B. current assets minus cash on hand, divided by current liabilities.C. current liabilities plus current assets, divided by cash on hand.D. cash on hand plus inventory, divided by current liabilities.E. cash on hand divided by current liabilities.Difficulty level: MediumTopic: CASH RATIOType: DEFINITIONS10. Ratios that measure a firm's financial leverage are known as _____ ratios.A. asset managementB. long-term solvencyC. short-term solvencyD. profitabilityE. market valueDifficulty level: EasyTopic: LONG-TERM SOLVENCY RATIOSType: DEFINITIONS11. The financial ratio measured as total assets minus total equity, divided by total assets, is the:A. total debt ratio.B. equity multiplier.C. debt-equity ratio.D. current ratio.E. times interest earned ratio.Difficulty level: EasyTopic: TOTAL DEBT RATIOType: DEFINITIONS12. The debt-equity ratio is measured as total:A. equity minus total debt.B. equity divided by total debt.C. debt divided by total equity.D. debt plus total equity.E. debt minus total assets, divided by total equity.Difficulty level: EasyTopic: DEBT-EQUITY RATIOType: DEFINITIONS13. The equity multiplier ratio is measured as total:A. equity divided by total assets.B. equity plus total debt.C. assets minus total equity, divided by total assets.D. assets plus total equity, divided by total debt.E. assets divided by total equity.Difficulty level: MediumTopic: EQUITY MULTIPLIERType: DEFINITIONS14. The financial ratio measured as earnings before interest and taxes, divided by interest expense is the:A. cash coverage ratio.B. debt-equity ratio.C. times interest earned ratio.D. gross margin.E. total debt ratio.Difficulty level: MediumTopic: TIMES INTEREST EARNED RATIOType: DEFINITIONS15. The financial ratio measured as earnings before interest and taxes, plus depreciation, divided by interest expense, is the:A. cash coverage ratio.B. debt-equity ratio.C. times interest earned ratio.D. gross margin.E. total debt ratio.Difficulty level: MediumTopic: CASH COVERAGE RATIOType: DEFINITIONS16. Ratios that measure how efficiently a firm uses its assets to generate sales are known as _____ ratios.A. asset managementB. long-term solvencyC. short-term solvencyD. profitabilityE. market valueDifficulty level: EasyTopic: ASSET MANAGEMENT RATIOSType: DEFINITIONS17. The inventory turnover ratio is measured as:A. total sales minus inventory.B. inventory times total sales.C. cost of goods sold divided by inventory.D. inventory times cost of goods sold.E. inventory plus cost of goods sold.Difficulty level: MediumTopic: INVENTORY TURNOVERType: DEFINITIONS18. The financial ratio days' sales in inventory is measured as:A. inventory turnover plus 365 days.B. inventory times 365 days.C. inventory plus cost of goods sold, divided by 365 days.D. 365 days divided by the inventory.E. 365 days divided by the inventory turnover.Difficulty level: MediumTopic: DAYS' SALES IN INVENTORYType: DEFINITIONS19. The receivables turnover ratio is measured as:A. sales plus accounts receivable.B. sales divided by accounts receivable.C. sales minus accounts receivable, divided by sales.D. accounts receivable times sales.E. accounts receivable divided by sales.Difficulty level: MediumTopic: RECEIVABLES TURNOVERType: DEFINITIONS20. The financial ratio days' sales in receivables is measured as:A. receivables turnover plus 365 days.B. accounts receivable times 365 days.C. accounts receivable plus sales, divided by 365 days.D. 365 days divided by the receivables turnover.E. 365 days divided by the accounts receivable.Difficulty level: MediumTopic: DAYS' SALES IN RECEIVABLESType: DEFINITIONS21. The total asset turnover ratio is measured as:A. sales minus total assets.B. sales divided by total assets.C. sales times total assets.D. total assets divided by sales.E. total assets plus sales.Difficulty level: EasyTopic: TOTAL ASSET TURNOVERType: DEFINITIONS22. Ratios that measure how efficiently a firm's management uses its assets and equity to generate bottom line net income are known as _____ ratios.A. asset managementB. long-term solvencyC. short-term solvencyD. profitabilityE. market valueDifficulty level: EasyTopic: PROFITABILITY RATIOSType: DEFINITIONS23. The financial ratio measured as net income divided by sales is known as the firm's:A. profit margin.B. return on assets.C. return on equity.D. asset turnover.E. earnings before interest and taxes.Difficulty level: EasyTopic: PROFIT MARGINType: DEFINITIONS24. The financial ratio measured as net income divided by total assets is known as the firm's:A. profit margin.B. return on assets.C. return on equity.D. asset turnover.E. earnings before interest and taxes.Difficulty level: EasyTopic: RETURN ON ASSETSType: DEFINITIONS25. The financial ratio measured as net income divided by total equity is known as the firm's:A. profit margin.B. return on assets.C. return on equity.D. asset turnover.E. earnings before interest and taxes.Difficulty level: EasyTopic: RETURN ON EQUITYType: DEFINITIONS26. The financial ratio measured as the price per share of stock divided by earnings per share is known as the:A. return on assets.B. return on equity.C. debt-equity ratio.D. price-earnings ratio.E. Du Pont identity.Difficulty level: EasyTopic: PRICE-EARNINGS RATIOType: DEFINITIONS27. The market-to-book ratio is measured as:A. total equity divided by total assets.B. net income times market price per share of stock.C. net income divided by market price per share of stock.D. market price per share of stock divided by earnings per share.E. market value of equity per share divided by book value of equity per share.Difficulty level: MediumTopic: MARKET-TO-BOOK RATIOType: DEFINITIONS28. The _____ breaks down return on equity into three component parts.A. Du Pont identityB. return on assetsC. statement of cash flowsD. asset turnover ratioE. equity multiplierDifficulty level: MediumTopic: DU PONT IDENTITYType: DEFINITIONS29. The External Funds Needed (EFN) equation does not measure the:A. additional asset requirements given a change in sales.B. additional total liabilities raised given the change in sales.C. rate of return to shareholders given the change in sales.D. net income expected to be earned given the change in sales.E. None of the above.Difficulty level: MediumTopic: EXTERNAL FUNDS NEEDEDType: DEFINITIONS30. To calculate sustainable growth rate without using return on equity, the analyst needs the:A. profit margin.B. payout ratio.C. debt-to-equity ratio.D. total asset turnover.E. All of the above.Difficulty level: MediumTopic: SUSTAINABLE GROWTH RATEType: DEFINITIONS31. Growth can be reconciled with the goal of maximizing firm value:A. because greater growth always adds to value.B. because growth must be an outcome of decisions that maximize NPV.C. because growth and wealth maximization are the same.D. because growth of any type cannot decrease value.E. None of the above.Difficulty level: MediumTopic: GROWTHType: DEFINITIONS32. Sustainable growth can be determined by the:A. profit margin, total asset turnover and the price to earnings ratio.B. profit margin, the payout ratio, the debt-to-equity ratio, and the asset requirement or asset turnover ratio.C. Total growth less capital gains growth.D. Either A or B.E. None of the above.Difficulty level: MediumTopic: SUSTAINABLE GROWTHType: DEFINITIONS33. Which of the following will increase sustainable growth?A. Buy back existing stockB. Decrease debtC. Increase profit marginD. Increase asset requirement or asset turnover ratioE. Increase dividend payout ratioDifficulty level: MediumTopic: SUSTAINABLE GROWTHType: DEFINITIONS34. The main objective of long-term financial planning models is to:A. determine the asset requirements given the investment activities of the firm.B. plan for contingencies or uncertain events.C. determine the external financing needs.D. All of the above.E. None of the above.Difficulty level: MediumTopic: LONG TERM PLANNINGType: DEFINITIONS35. On a common-size balance sheet, all _____ accounts are shown as a percentage of _____.A. income; total assetsB. liability; net incomeC. asset; salesD. liability; total assetsE. equity; salesDifficulty level: MediumTopic: COMMON-SIZE BALANCE SHEETType: DEFINITIONS36. Which one of the following statements is correct concerning ratio analysis?A. A single ratio is often computed differently by different individuals.B. Ratios do not address the problem of size differences among firms.C. Only a very limited number of ratios can be used for analytical purposes.D. Each ratio has a specific formula that is used consistently by all analysts.E. Ratios can not be used for comparison purposes over periods of time.Difficulty level: MediumTopic: RATIO ANALYSISType: DEFINITIONS37. Which of the following are liquidity ratios?I. cash coverage ratioII. current ratioIII. quick ratioIV. inventory turnoverA. II and III onlyB. I and II onlyC. II, III, and IV onlyD. I, III, and IV onlyE. I, II, III, and IVDifficulty level: MediumTopic: LIQUIDITY RATIOSType: DEFINITIONS38. An increase in which one of the following accounts increases a firm's current ratio without affecting its quick ratio?A. accounts payableB. cashC. inventoryD. accounts receivableE. fixed assetsDifficulty level: MediumTopic: LIQUIDITY RATIOSType: DEFINITIONS39. A supplier, who requires payment within ten days, is most concerned with which one of the following ratios when granting credit?A. currentB. cashC. debt-equityD. quickE. total debtDifficulty level: MediumTopic: LIQUIDITY RATIOSType: DEFINITIONS40. A firm has a total debt ratio of .47. This means that that firm has 47 cents in debt for every:A. $1 in equity.B. $1 in total sales.C. $1 in current assets.D. $.53 in equity.E. $.53 in total assets.Difficulty level: MediumTopic: LONG-TERM SOLVENCY RATIOSType: DEFINITIONS41. The long-term debt ratio is probably of most interest to a firm's:A. credit customers.B. employees.C. suppliers.D. mortgage holder.E. shareholders.Difficulty level: MediumTopic: LONG-TERM SOLVENCY RATIOSType: DEFINITIONS42. A banker considering loaning a firm money for ten years would most likely prefer the firm have a debt ratio of _____ and a times interest earned ratio of _____.A. .75; .75B. .50; 1.00C. .45; 1.75D. .40; 2.50E. .35; 3.00Difficulty level: MediumTopic: LONG-TERM SOLVENCY RATIOSType: DEFINITIONS43. From a cash flow position, which one of the following ratios best measures a firm's ability to pay the interest on its debts?A. times interest earned ratioB. cash coverage ratioC. cash ratioD. quick ratioE. Interval measureDifficulty level: MediumTopic: LONG-TERM SOLVENCY RATIOSType: DEFINITIONS44. The higher the inventory turnover measure, the:A. faster a firm sells its inventory.B. faster a firm collects payment on its sales.C. longer it takes a firm to sell its inventory.D. greater the amount of inventory held by a firm.E. lesser the amount of inventory held by a firm.Difficulty level: MediumTopic: ASSET MANAGEMENT RATIOSType: DEFINITIONS45. Which one of the following statements is correct if a firm has a receivables turnover measure of 10?A. It takes a firm 10 days to collect payment from its customers.B. It takes a firm 36.5 days to sell its inventory and collect the payment from the sale.C. It takes a firm 36.5 days to pay its creditors.D. The firm has an average collection period of 36.5 days.E. The firm has ten times more in accounts receivable than it does in cash.Difficulty level: MediumTopic: ASSET MANAGEMENT RATIOSType: DEFINITIONS46. A total asset turnover measure of 1.03 means that a firm has $1.03 in:A. total assets for every $1 in cash.B. total assets for every $1 in total debt.C. total assets for every $1 in equity.D. sales for every $1 in total assets.E. long-term assets for every $1 in short-term assets.Difficulty level: MediumTopic: ASSET MANAGEMENT RATIOSType: DEFINITIONS47. Puffy's Pastries generates five cents of net income for every $1 in sales. Thus, Puffy's has a _____ of 5%.A. return on assetsB. return on equityC. profit marginD. Du Pont measureE. total asset turnoverDifficulty level: MediumTopic: PROFITABILITY RATIOSType: DEFINITIONS48. If a firm produces a 10% return on assets and also a 10% return on equity, then the firm:A. has no debt of any kind.B. is using its assets as efficiently as possible.C. has no net working capital.D. also has a current ratio of 10.E. has an equity multiplier of 2.Difficulty level: MediumTopic: PROFITABILITY RATIOSType: DEFINITIONS49. If shareholders want to know how much profit a firm is making on their entire investment in the firm, the shareholders should look at the:A. profit margin.B. return on assets.C. return on equity.D. equity multiplier.E. earnings per share.Difficulty level: MediumTopic: PROFITABILITY RATIOSType: DEFINITIONS50. BGL Enterprises increases its operating efficiency such that costs decrease while sales remain constant. As a result, given all else constant, the:A. return on equity will increase.B. return on assets will decrease.C. profit margin will decline.D. equity multiplier will decrease.E. price-earnings ratio will increase.Difficulty level: MediumTopic: PROFITABILITY RATIOSType: DEFINITIONS51. The only difference between Joe's and Moe's is that Joe's has old, fully depreciated equipment. Moe's just purchased all new equipment which will be depreciated over eight years. Assuming all else equal:A. Joe's will have a lower profit margin.B. Joe's will have a lower return on equity.C. Moe's will have a higher net income.D. Moe's will have a lower profit margin.E. Moe's will have a higher return on assets.Difficulty level: MediumTopic: PROFITABILITY RATIOSType: DEFINITIONS52. Last year, Alfred's Automotive had a price-earnings ratio of 15. This year, the price earnings ratio is 18. Based on this information, it can be stated with certainty that:A. the price per share increased.B. the earnings per share decreased.C. investors are paying a higher price for each share of stock purchased.D. investors are receiving a higher rate of return this year.E. either the price per share, the earnings per share, or both changed.Difficulty level: MediumTopic: MARKET VALUE RATIOSType: DEFINITIONS53. Turner's Inc. has a price-earnings ratio of 16. Alfred's Co. has a price-earnings ratio of 19. Thus, you can state with certainty that one share of stock in Alfred's:A. has a higher market price than one share of stock in Turner's.B. has a higher market price per dollar of earnings than does one share of Turner's.C. sells at a lower price per share than one share of Turner's.D. represents a larger percentage of firm ownership than does one share of Turner's stock.E. earns a greater profit per share than does one share of Turner's stock.Difficulty level: MediumTopic: MARKET VALUE RATIOType: DEFINITIONS54. Which two of the following are most apt to cause a firm to have a higher price-earnings ratio?I. slow industry outlookII. high prospect of firm growthIII. very low current earningsIV. investors with a low opinion of the firmA. I and II onlyB. II and III onlyC. II and IV onlyD. I and III onlyE. III and IV onlyDifficulty level: MediumTopic: MARKET VALUE RATIOSType: DEFINITIONS55. Vinnie's Motors has a market-to-book ratio of 3. The book value per share is $4.00. Holding market-to-book constant, a $1 increase in the book value per share will:A. cause the accountants to increase the equity of the firm by an additional $2.B. increase the market price per share by $1.C. increase the market price per share by $12.D. tend to cause the market price per share to rise.E. only affect book values but not market values.Difficulty level: MediumTopic: MARKET VALUE RATIOSType: DEFINITIONS56. Which one of the following sets of ratios applies most directly to shareholders?A. return on assets and profit marginB. quick ratio and times interest earnedC. price-earnings ratio and debt-equity ratioD. market-to-book ratio and price-earnings ratioE. cash coverage ratio and times equity multiplierDifficulty level: MediumTopic: MARKET VALUE RATIOSType: DEFINITIONS57. The three parts of the Du Pont identity can be generally described as:I. operating efficiency, asset use efficiency and firm profitability.II. financial leverage, operating efficiency and asset use efficiency.III. the equity multiplier, the profit margin and the total asset turnover.IV. the debt-equity ratio, the capital intensity ratio and the profit margin.A. I and II onlyB. II and III onlyC. I and IV onlyD. I and III onlyE. III and IV onlyDifficulty level: MediumTopic: DU PONT IDENTITYType: DEFINITIONS58. If a firm decreases its operating costs, all else constant, then:A. the profit margin increases while the equity multiplier decreases.B. the return on assets increases while the return on equity decreases.C. the total asset turnover rate decreases while the profit margin increases.D. both the profit margin and the equity multiplier increase.E. both the return on assets and the return on equity increase.Difficulty level: MediumTopic: DU PONT IDENTITYType: DEFINITIONS59. Which one of the following statements is correct?A. Book values should always be given precedence over market values.B. Financial statements are frequently the basis used for performance evaluations.C. Historical information has no value when predicting the future.D. Potential lenders place little value on financial statement information.E. Reviewing financial information over time has very limited value.Difficulty level: MediumTopic: EVALUATING FINANCIAL STATEMENTSType: DEFINITIONS60. It is easier to evaluate a firm using its financial statements when the firm:A. is a conglomerate.B. is global in nature.C. uses the same accounting procedures as other firms in its industry.D. has a different fiscal year than other firms in its industry.E. tends to have one-time events such as asset sales and property acquisitions.Difficulty level: MediumTopic: EVALUATING FINANCIAL STATEMENTSType: DEFINITIONS61. Which two of the following represent the most effective methods of directly evaluating the financial performance of a firm?I. comparing the current financial ratios to those of the same firm from prior time periodsII. comparing a firm's financial ratios to those of other firms in the firm's peer group who have similar operationsIII. comparing the financial statements of the firm to the financial statements of similar firms operating in other countriesIV. comparing the financial ratios of the firm to the average ratios of all firms located in the same geographic areaA. I and II onlyB. II and III onlyC. III and IV onlyD. I and IV onlyE. I and III onlyDifficulty level: MediumTopic: EVALUATING FINANCIAL STATEMENTSType: DEFINITIONS62. In the financial planning model, external funds needed (EFN) is equal to changes inA. assets - (liabilities - equity).B. assets - (liabilities + equity).C. (assets + liabilities - equity).D. (assets + equity - liabilities).E. assets - equity.Difficulty level: MediumTopic: EXTERNAL FUNDS NEEDEDType: DEFINITIONS63. Which of the following represent problems encountered when comparing the financial statements of one firm with those of another firm?I. Either one, or both, of the firms may be conglomerates and thus have unrelated lines of business.II. The operations of the two firms may vary geographically.III. The firms may use differing accounting methods for inventory purposes.IV. The two firms may be seasonal in nature and have different fiscal year ends.A. I and II onlyB. II and III onlyC. I, III, and IV onlyD. I, II, and III onlyE. I, II, III, and IVDifficulty level: MediumTopic: EVALUATING FINANCIAL STATEMENTSType: DEFINITIONS64. A firm's sustainable growth rate in sales directly depends on its:A. debt to equity ratio.B. profit margin.C. dividend policy.D. asset efficiency.E. All of the above.Difficulty level: MediumTopic: SUSTAINABLE GROWTH RATEType: DEFINITIONS65. The sustainable growth rate will be equivalent to the internal growth rate when:A. a firm has no debt.B. the growth rate is positive.C. the plowback ratio is positive but less than 1.D. a firm has a debt-equity ratio exactly equal to 1.E. net income is greater than zero.Difficulty level: MediumTopic: SUSTAINABLE GROWTH RATEType: DEFINITIONS66. The sustainable growth rate:A. assumes there is no external financing of any kind.B. is normally higher than the internal growth rate.C. assumes the debt-equity ratio is variable.D. is based on receiving additional external debt and equity financing.E. assumes that 100% of all income is retained by the firm.Difficulty level: MediumTopic: SUSTAINABLE GROWTH RATEType: DEFINITIONS67. If a firm bases its growth projection on the rate of sustainable growth, and shows positive net income, then the:A. fixed assets will have to increase at the same rate, regardless of the current capacity level.B. number of common shares outstanding will increase at the same rate of growth.C. debt-equity ratio will have to increase.D. debt-equity ratio will remain constant while retained earnings increase.E. fixed assets, debt-equity ratio, and number of common shares outstanding will all increase.Difficulty level: MediumTopic: SUSTAINABLE GROWTH RATEType: DEFINITIONS68. Marcie's Mercantile wants to maintain its current dividend policy, which is a payout ratio of 40%. The firm does not want to increase its equity financing but is willing to maintain its current debt-equity ratio. Given these requirements, the maximum rate at which Marcie's can grow is equal to:A. 40% of the internal rate of growth.B. 60% of the internal rate of growth.C. the internal rate of growth.D. the sustainable rate of growth.E. 60% of the sustainable rate of growth.Difficulty level: MediumTopic: SUSTAINABLE GROWTH RATEType: DEFINITIONS69. One of the primary weaknesses of many financial planning models is that they:A. rely too much on financial relationships and too little on accounting relationships.B. are iterative in nature.C. ignore the goals and objectives of senior management.D. are based solely on best case assumptions.E. ignore the size, risk, and timing of cash flows.Difficulty level: MediumTopic: FINANCIAL PLANNING MODELSType: DEFINITIONS70. Financial planning, when properly executed:A. ignores the normal restraints encountered by a firm.B. ensures that the primary goals of senior management are fully achieved.C. reduces the necessity of daily management oversight of the business operations.D. helps ensure that proper financing is in place to support the desired level of growth.E. eliminates the need to plan more than one year in advance.Difficulty level: MediumTopic: FINANCIAL PLANNINGType: DEFINITIONS71. When examining the EBITDA ratio, lower numbers are:A. considered good.B. considered mediocre.C. considered poor.D. indifferent to higher numbers.E. it is impossible to garner information from this ratio.Difficulty level: MediumTopic: EBITDA RATIOType: DEFINITIONS。
高盛财经词典—英汉对照
高盛财经词典—英汉对照A1. accounting (会计)The process of recording, summarizing, and analyzing financial transactions in order to prepare financial statements and reports.会计是记录、汇总和分析财务交易的过程，以便编制财务报表和报告。
2. asset (资产)Anything that has a value and is owned by an individual, company, or organization.任何具有价值并由个人、公司或组织拥有的物品。
3. audit (审计)An independent examination and verification of an organization’s financial records and sta tements by a qualified person or firm.由合格的个人或公司对组织的财务记录和报表进行独立检查和核实。
B1. balance sheet (资产负债表)A financial statement that shows a company’s assets, liabilities, and shareholders’ equity at a specific point in time.资产负债表是一份显示公司在特定时间点的资产、负债和股东权益的财务报表。
2. bear market (熊市)A market condition in which prices of securities are falling or expected to fall, often characterized by widespread pessimism and selling.指证券价格下跌或预计下跌的市场状况，通常以广泛的悲观情绪和抛售行为为特征。
财务会计英语-unit9-Analyzing-Financial-Statements全文
Section 3 Vertical Analysis (垂直分析)
Example of common-size income statement ( 百分比利润表实例) Example 9.3 shows the common-size comparative income statement (百分比比较 利润表) for Lott Law Firm.
Financial Accounting English( Second Edition)
Section 3 Vertical Analysis (垂直分析)
Vertical analysis involves the up-down movement of our eyes as we review commonsize financial statements. In vertical analysis, percentages are also used. They are used to show the relationship of a part (individual or a group of financial statement items) to a total (base amount) in a single financial statement.
LOGO
Unit 9
Analyzing Financial Statements
Financial Accounting English (Second Edition)
Contents
Section 1 Purpose of Financial Statement Analysis Section 2 Horizontal Analysis Section 3 Vertical Analysis Section 4 Ratio Analysis
Financial Statements Analysis
0.8 0.8
1 1.667
1 0.6
Somdet 0.018 t
Normal year
Nodett
0.06
0.6 0.6
Hale Waihona Puke 1 0.680.1 0.1
1 1
1 1.667
1 1.134
Somdet 0.068 t
Good year
Nodett
0.09
0.6 0.6
1 0.787
0.125 0.125
1.2 1.2
Value Investing: The Graham Technique
How to use these ratios?
1. Pick a benchmark: ratios of the same firm in different years; ratios of different firms in the same industry For example: /p/sum_conameu.html
Major Financial statements
Major Financial statements
2.the balance sheet ( 资产负债表): 反映公司 的财务现状. Assets=Liability+shareholders' equity current assets+ fixed assets+intangible fixed assets=current liability+long term debt+common stock + preferred stock+ retained earnings If all items are express as a percentage of total assets, it is called a common size balance sheet.
Analysis of Financial Statements
management decisions will have later on. A：Now I realize the importance of financial documentation. Thank you. B：It is my pleasure.
会计英语
1
Section Analysis of Financial Statements
Part 1 Workplace Spoken English
1. Follow the Samples
A：Don’t you get tired of recording all those different transactions? B：No. It needs to be done. A：It looks like a make work project（多此一举）to me. You write all
2. Put in Use
· · ·
Complete the dialogue according to the Chinese hints·
1 我有一些事情要跟你谈谈。
_______________________________________________________________________________
10
Part 2 Intensive Reading
Analysis of Financial Statements (1)
II. Complete the following statements according to the passage.
Business Analysis Using Financial Statements
Competitive strategy analysis
Competitive strategy analysis is the evaluation of a company’s decisions and success at establishing a competitive advantages
Common tools
Risk analysis ——— Evaluate riskiness & creditworthiness
Sources and uses —Evaluate source & of funds analysis deployment of funds
Ratio Cash analysis flow
analysis
Prospective Analysis
Process to forecast future payoffs
Business Environment & Strategy Analysis Accounting Analysis
Financial Analysis
Intrinsic Value
2
Introduction to Business Analysis
Evaluation Prospects
Evaluation Risk
Business Decision Makers •Equity Investors •Creditors •Managers •Merger and Acquisition Analysis •External Auditors •Directors •Regulators •Employees and Unions
财产证明FinancialStatement
财产证明FinancialStatement第一篇：财产证明Financial StatementTranslation:Financial StatementPASSPORT NO.:VAF NO.:APPLICANT NAME:Section I About the fees in Southampton(i)The cost of my course and living expenses per annum listTuition Fee(for academic year 2007-2008):£10,500The Cost of Living(including accommodation): £9,000Total Expenses for the duration of my course: £19,50019,500GPB x 15.60 = 304,200.—RMB(ii)The time deposit record in Bank of Communication listed as below:2006/11/06USD 6393.182007/01/29CNY 20,0002007/01/29CNY 20,0002007/01/30CNY 50,0002007/02/01CNY 120,0002007/02/02CNY 50,000This money was transferred into Bank of Communication from China Bank, Bank of Constructions and other banks during the end of 2006 and early this year.They are the savings of my parents from wages and rental.Section II About my sponsors My parents’ situation can be seen on their working and income certificate.There are some extra supporting documents that can be provided:IThe Real Estate Certificate of the house for accommodationI live in this apartment alone in this summer vocation while my parents live in another apartment which belongs to mygrandparents.So after I leave for Britain, this mentioned apartment will be rented at price of more than RMB 5,000 per month.IIThe Real Estate Certificate of the house in renting now My father bought these two stores in 2002 and now they are rented at a price of RMB4,200 per month totally.第二篇：财产证明财产证明财产证明一、存款证明相关问题（一）存款证明的用途1、自费留学且没有奖学金申请者需向学校证明其有经济能力支付学费、生活费。
《会计专业英语》Chapter 8 Financial Statements
6
8.1.2 Income Statement
1. The Purpose of an Income Statement ➢ An Income Statement is a financial statement that summarizes the
profitability of a business entity for a specified period of time. ➢ Tlp users of financial statements:
➢ Information in the Income Statement not only helps users evaluate past performance, but also provides insights into the likelihood of achieving a particular level of cash flows in the future.
7
2. The Elements of an Income Statement
➢ The Income Statement classifies amounts into gross profit on sales, income from operations, income before taxes, and net income.
关于财务报告分析的英语(3篇)
第1篇Introduction:Financial reporting is a crucial aspect of any organization, providing stakeholders with vital information about its financial performance and position. Analyzing financial reports helps investors, creditors, and other interested parties make informed decisions. This article aims to provide a comprehensive guide to financial report analysis, covering various aspects such as balance sheets, income statements, cash flow statements, and ratio analysis.I. Understanding Financial Reports1. Financial Statements:Financial statements are formal records of the financial activities of a company. They include the balance sheet, income statement, and cash flow statement.a. Balance Sheet:The balance sheet provides a snapshot of a company's financial position at a specific point in time. It consists of assets, liabilities, and shareholders' equity.b. Income Statement:The income statement shows a company's financial performance over a specific period. It includes revenues, expenses, and net income.c. Cash Flow Statement:The cash flow statement presents the inflow and outflow of cash within a company over a specific period. It consists of operating, investing, and financing activities.2. Notes to Financial Statements:Notes to financial statements provide additional information about the figures presented in the statements. They help users understand theaccounting policies, assumptions, and estimates used in preparing the financial statements.II. Analyzing Financial Reports1. Horizontal Analysis:Horizontal analysis, also known as trend analysis, compares financial data over multiple periods to identify trends and patterns. It helps in assessing the growth rate, profitability, and financial stability of a company.2. Vertical Analysis:Vertical analysis involves expressing each item in a financial statement as a percentage of a base figure, such as total assets or total sales. This analysis helps in understanding the relative importance of each item in the statement.3. Ratio Analysis:Ratio analysis involves calculating and interpreting various ratios to assess the financial health and performance of a company. Common ratios include liquidity ratios, profitability ratios, solvency ratios, and efficiency ratios.a. Liquidity Ratios:Liquidity ratios measure a company's ability to meet its short-term obligations. Common liquidity ratios include the current ratio and quick ratio.b. Profitability Ratios:Profitability ratios assess a company's ability to generate profits from its operations. Common profitability ratios include the gross profit margin, operating profit margin, and net profit margin.c. Solvency Ratios:Solvency ratios measure a company's ability to meet its long-term obligations. Common solvency ratios include the debt-to-equity ratio and interest coverage ratio.d. Efficiency Ratios:Efficiency ratios measure how effectively a company utilizes its assets and resources. Common efficiency ratios include the inventory turnover ratio and receivables turnover ratio.III. Key Aspects of Financial Report Analysis1. Earnings Per Share (EPS):EPS is a measure of a company's profitability. It is calculated by dividing net income by the number of outstanding shares. A higher EPS indicates higher profitability.2. Return on Equity (ROE):ROE measures how effectively a company utilizes its shareholders' equity to generate profits. It is calculated by dividing net income by shareholders' equity. A higher ROE indicates better profitability.3. Return on Assets (ROA):ROA measures how effectively a company utilizes its assets to generate profits. It is calculated by dividing net income by total assets. A higher ROA indicates better asset utilization.4. Debt-to-Equity Ratio:The debt-to-equity ratio compares a company's total debt to its shareholders' equity. A higher ratio indicates higher financial leverage and higher risk.5. Inventory Turnover Ratio:The inventory turnover ratio measures how quickly a company sells its inventory. A higher ratio indicates efficient inventory management.IV. ConclusionFinancial report analysis is a critical tool for understanding a company's financial performance and position. By analyzing various financial statements, ratios, and key aspects, stakeholders can make informed decisions about their investments, lending, and other business activities. It is important to consider both historical and current data while analyzing financial reports to gain a comprehensive understanding of a company's financial health.Remember, financial report analysis is not an exact science, and it requires a thorough understanding of accounting principles and industry-specific factors. By following the guidelines provided in this article, stakeholders can navigate the complexities of financial report analysis and make well-informed decisions.第2篇IntroductionFinancial reporting is a critical aspect of any business, providing stakeholders with vital information about the company's financial performance, position, and cash flows. This guide aims to delve into the intricacies of financial report analysis, offering insights into how to interpret financial statements, assess financial health, and make informed decisions. By the end of this article, readers should have a comprehensive understanding of the key components of financial report analysis and the tools required to perform it effectively.Understanding Financial StatementsFinancial statements are the primary source of information for financial report analysis. The main financial statements include the balance sheet, income statement, and cash flow statement. Each statement serves a different purpose and provides a unique perspective on the company's financial health.1. Balance SheetThe balance sheet provides a snapshot of the company's financialposition at a specific point in time. It consists of three main sections:assets, liabilities, and equity. The balance sheet follows the accounting equation, which states that assets equal liabilities plus equity.- Assets: These are the resources owned by the company, including cash, accounts receivable, inventory, property, and equipment.- Liabilities: These are the company's obligations, such as accounts payable, loans, and other debts.- Equity: This represents the ownership interest in the company, which includes retained earnings and common stock.2. Income StatementThe income statement, also known as the profit and loss statement, shows the company's financial performance over a specific period. It consists of three main sections: revenue, expenses, and net income.- Revenue: This represents the income generated from the company's primary business activities.- Expenses: These are the costs incurred in generating revenue, including salaries, rent, utilities, and other operating expenses.- Net Income: This is the difference between revenue and expenses, representing the company's profit or loss for the period.3. Cash Flow StatementThe cash flow statement provides information about the company's cash inflows and outflows during a specific period. It consists of three main sections: operating activities, investing activities, and financing activities.- Operating Activities: These are the cash flows resulting from the company's primary business activities.- Investing Activities: These are the cash flows resulting from the company's investments in assets and other businesses.- Financing Activities: These are the cash flows resulting from the company's financing activities, such as issuing or repurchasing stock and taking on or repaying debt.Key Financial RatiosFinancial ratios are tools used to analyze the financial statements and assess the company's performance and health. Here are some of the most common financial ratios:1. Liquidity RatiosLiquidity ratios measure the company's ability to meet its short-term obligations. The most common liquidity ratios include:- Current Ratio: This ratio compares current assets to current liabilities, indicating the company's ability to cover its short-term obligations.- Quick Ratio: This ratio is similar to the current ratio but excludes inventory, providing a more stringent measure of liquidity.- Cash Ratio: This ratio compares cash and cash equivalents to current liabilities, indicating the company's ability to meet its short-term obligations using only cash.2. Solvency RatiosSolvency ratios measure the company's ability to meet its long-term obligations. The most common solvency ratios include:- Debt-to-Equity Ratio: This ratio compares total debt to total equity, indicating the extent to which the company is using debt financing.- Interest Coverage Ratio: This ratio compares earnings before interest and taxes (EBIT) to interest expense, indicating the company's ability to cover its interest payments.- Times Interest Earned Ratio: This ratio compares EBIT to interest expense, indicating the number of times the company can cover its interest payments.3. Profitability RatiosProfitability ratios measure the company's ability to generate profits from its operations. The most common profitability ratios include:- Gross Margin Ratio: This ratio compares gross profit to revenue, indicating the company's ability to generate profits from its sales.- Net Margin Ratio: This ratio compares net income to revenue, indicating the company's overall profitability.- Return on Assets (ROA): This ratio compares net income to total assets, indicating the company's efficiency in using its assets to generate profits.- Return on Equity (ROE): This ratio compares net income to shareholders' equity, indicating the company's profitability from the perspective of its shareholders.4. Efficiency RatiosEfficiency ratios measure the company's ability to manage its assets and liabilities effectively. The most common efficiency ratios include:- Inventory Turnover Ratio: This ratio compares cost of goods sold to average inventory, indicating the company's ability to manage its inventory effectively.- Accounts Receivable Turnover Ratio: This ratio compares net credit sales to average accounts receivable, indicating the company's ability to collect payments from its customers.- Total Asset Turnover Ratio: This ratio compares net sales to average total assets, indicating the company's ability to generate sales from its assets.Performing Financial Report AnalysisTo perform a comprehensive financial report analysis, follow these steps:1. Gather Financial Statements: Obtain the company's financial statements, including the balance sheet, income statement, and cash flow statement.2. Calculate Financial Ratios: Calculate the relevant financial ratios using the data from the financial statements.3. Compare Ratios: Compare the company's financial ratios to industry averages and historical performance to identify strengths and weaknesses.4. Identify Trends: Analyze the company's financial ratios over time to identify trends and patterns in its financial performance.5. Perform Vertical and Horizontal Analysis: Perform vertical analysis (also known as common-size analysis) to compare different line items within a financial statement as a percentage of a base item. Perform horizontal analysis to compare financial statement items over different periods.6. Analyze Cash Flow: Analyze the cash flow statement to understand the company's cash inflows and outflows and its ability to generate cash.7. Assess Financial Health: Based on the analysis, assess the company's financial health and make informed decisions about its future prospects.ConclusionFinancial report analysis is a crucial tool for understanding a company's financial performance and health. By interpreting financial statements, calculating financial ratios, and analyzing trends, stakeholders can make informed decisions about their investments, business operations, and overall financial strategy. This guide has provided a comprehensive overview of financial report analysis, offering insights into the key components and tools required to perform it effectively.第3篇Introduction:Financial report analysis is a crucial process for businesses to evaluate their financial performance, make informed decisions, and identify areas for improvement. By thoroughly analyzing financial reports, businesses can gain insights into their profitability, liquidity, solvency, and overall financial health. This guide will provide an overview of financial report analysis, covering key components, techniques, and best practices.I. Understanding Financial Reports:1. Income Statement:The income statement, also known as the profit and loss statement, provides a summary of a company's revenues, expenses, gains, and losses over a specific period. It helps assess the company's profitability.2. Balance Sheet:The balance sheet presents a snapshot of a company's financial position at a particular point in time. It includes assets, liabilities, and shareholders' equity, providing a clear picture of the company's financial structure.3. Cash Flow Statement:The cash flow statement tracks the inflow and outflow of cash within a company over a specific period. It helps evaluate the company'sliquidity and cash management capabilities.II. Key Components of Financial Report Analysis:1. Horizontal Analysis:Horizontal analysis compares financial data over multiple periods to identify trends, growth rates, and changes in performance. It involves calculating percentage changes and ratios.2. Vertical Analysis:Vertical analysis, also known as common-size analysis, expresses each item on the financial statements as a percentage of a base figure,typically total assets or total sales. This technique provides insights into the composition and structure of the financial statements.3. Ratio Analysis:Ratio analysis involves calculating and interpreting various financial ratios to assess a company's financial performance and position. Common ratios include liquidity ratios (current ratio, quick ratio), solvency ratios (debt-to-equity ratio, interest coverage ratio), profitability ratios (return on assets, return on equity), and efficiency ratios (inventory turnover, receivables turnover).III. Techniques for Financial Report Analysis:1. Trend Analysis:Trend analysis involves examining the historical data of a company to identify patterns, trends, and cyclicality. It helps predict future performance and assess the sustainability of past trends.2. Benchmarking:Benchmarking involves comparing a company's financial performance with industry averages or competitors. This technique helps identify areas of strength and weakness and provides a reference for improvement.3. DuPont Analysis:DuPont analysis breaks down the return on equity (ROE) into three components: net profit margin, asset turnover, and equity multiplier. This technique helps identify the factors driving ROE and assess the company's efficiency and profitability.IV. Best Practices for Financial Report Analysis:1. Data Accuracy and Consistency:Ensure that the financial data used for analysis is accurate, complete, and consistent. Inconsistencies or errors can lead to misleading conclusions.2. Contextual Analysis:Consider the broader economic, industry, and company-specific factors that may impact financial performance. Contextual analysis helps avoid making hasty conclusions based solely on financial data.3. Long-term Perspective:Focus on long-term trends and performance rather than short-term fluctuations. Financial report analysis should provide insights into the company's sustainable growth potential.4. Continuous Learning:Stay updated with the latest financial reporting standards, analysis techniques, and industry trends. Continuous learning ensures that the analysis remains relevant and effective.Conclusion:Financial report analysis is a vital tool for businesses to evaluate their financial performance, make informed decisions, and identify areas for improvement. By understanding the key components, techniques, and best practices, businesses can gain valuable insights from their financial reports and achieve long-term success.。
Financial-Statement-Analysis
19-2
Financial Statement Analysis
• Financial statement analysis can be used to discover mispriced securities.
• Financial accounting data are widely available, but
• Economic earnings – Sustainable cash flow that can be paid to stockholders without impairing productive capacity of the firm
• Accounting earnings – Affected by conventions regarding the valuation of assets
• Past profitability does not guarantee future profitability.
• Security values are based on future profits. • Expectations of future dividends determine
• Inflation and Interest Expense • Fair Value Accounting • Quality of Earnings • International Accounting Conventions
INVESTMENTS | BODIE, KANE, MA27RCUS
• If ROA > r, the firm earns more than it pays out to creditors and ROE increases.
FINANCIALSTATEMENT模版
FINANCIALSTATEMENT模版FINANCIAL STATEMENTI. TOTAL EXPENSES FOR MY STUDY IN THE U.K.A. Pre-sessional coursea)The tuition fee for 4-Week Study Skills course will be ￡927.00Please refer to the copy of 4-Week Study Skills course on sheet 1b)The cost of my room is ￡51.10 a week (total to pay for the 4-weekaccommodation=￡204.40)Please refer to the e-mail from Jacqui Sharpe on sheet 2c)Total: a + b=￡XXX+￡XXX=￡XXXX=RMBXXXXThe exchange rate is (GBP: CNY=14))B. Academic year 2002/2003, Educational Research Department, MA Education, Full- timea)The tuition fee for the academic year 2002/2003 will be ￡8,000Please refer to the offer from Lancaster University on 13th May 2002b)Living costs will be between ￡7,500 and ￡8,000 (including accommodation, food, books,travel etc.).Please refer to the offer from Lancaster University on 13th May 2002c)Total: a + b=￡8,000+￡7,500 or ￡8,000+￡8,000≈from ￡15,500 to ￡16,000≈ RMBXXXXX The exchange rate is (GBP: CNY=14)TOTAL: Ac)+Bc)=￡XXXXX+￡XXXXX=￡XXXXX≈RMBXXXXXXII. TOTAL AMOUNT IN MY PARENTS’ACCOUNT: RMB XXXXXX Source: These amounts of money are my parents’ income over years.Please refer to the working and income certificate of my parents on sheet 3-7A. Four fixed savings receipts in my mother’s name in BCCB 定期存单(BEIJING CITY COMMERCIAL BANK)Depositor: XXX XXXNote: When these fixed savings receipts were due, the principal was transferred automatically for another deposit term.Please check the copi es of my mother’s fixed savings receipts on sheet 8-9B. Three bankbooks 存折◆BCCB (BEIJING CITY COMMERCIAL BANK)Depositor: XXXXXXAccount No.XXXXXXOpening Date: 1998/04/16Please check the copies of my mother’s BCCB bankbook on sheet 10-11◆ICBC (INDUS TRIAL AND COMMERCIAL BANK OF CHINA)Depositor: XXXXXXAccount No.find from computer of the bank, so they used black pentacle instead of my father’s middle name “fang”Please check the copies of my father’s ICBC bankbook on sheet 12-13◆ICBC (INDUSTRIAL AND COMMERCIAL BANK OF CHINA)Depositor: XXXXXXAccount No.C. Money from account of Stock MarketCapital Balance: RMBXXXXXXNote: My father started stock investment in 1993 (Shanghai) and in 1995 (Shenzhen). He deposited most of his money in stock market. Because he believed that stock investment can bring him more benefits than bank. Furthermore, the computer in stock exchange did not have my father’s middle name also. They used black pentacle instead of my father’s middle name “fang”Please refer to the following materials on sheet 26-331)Confirmation on Opening of Account in Shanghai on sheet 26-272)Confirmation on Opening of Account in Shenzhen on sheet 28-293)The latest 3 months deal list from CHINA GALAXY SECURITIES CO., L TD (May to August) onsheet 30-314)Certificate of stock investment from CHINA GALAXYSECURITIES CO., L TD on sheet32-33 TOTAL：A+B+C=Four savings receipts + Three bankbooks + Capital Balance in Stock Market =RMB XXXXX + RMBXXXXX + RMBXXXXX=RMBXXXXX III. Other available funds from my sponsor is RMB XXXXXA. Housing CertificateNote: In September 1999, my parents spent RMB XXXXXX on purchasing housing in Northern area of BeijingPlease refer to the following materials on sheet 34-471)Housing Certificate on sheet 34-462)House Sales V ouch Beijing Real Estates Development Invoice on sheet 47B. Stock investmentNote: Share’s Market V alue in my father’s stock account is RMBXXXXXXPlease refer to the Certificate of stock investment from CHINA GALAXY SECURITIES CO., L TD. on sheet 32-33 Total other available funds: A+B= RMB XXXXXX+ RMBXXXXXX=RMBXXXXXX。
Financial Statement Analysis
15
Relation between ROA and ROCE
• ROCE is the residual return which goes to the
common shareholders. Since it may be low in poor years but high in good years, it has a risk— that is, the residual return is not known.
•
A large asset turnover is preferred to a low one.
Total assets turnover is related to three similar ratios:
1
Accounts Receivable Turnover
2
Inventory turnover
NOTICE: When these two
ratios are multiplied, Sales cancels out.
ROA = (profit margin ratio) x (total assets turnover)
8
Profit Margin Ratio
• Profit margin ratio measures a firm's ability to control its expenses relative to its sales.
Financial Accounting
Financial Statement Analysis
Purpose of Financial Statement Analysis
To understand the economics of a firm To help forecast its future profitability and risk
Financial Statement Analysis and Security Valuation (1)
• Alpha technologies:
Passive investment needs a beta technology (except for index investing) Active investing needs a beta and an alpha technology
1-7
Passive Strategies: Beta Technologies
1-2
What Will You Learn from the Course
• •
•
How intrinsic values are calculated What determines a firm’s value
How businesses are analyzed to assess the value they create
______________________________________________________________________________
*
Based on the period 1926-1929.
**
Based on the period 1990-1997.
Source: Stocks bonds Bills and Inflation 1998 Yearbook, (Chicago: Ibbotson Associates, 1998).
1-3
Users of Firms’ Financial Information (Demand Side)
• Equity Investors
Investment analysis Management performance evaluatiover value in the firm
Unit 9 Financial statement
UNIT 9 FINANCIAL STATEMENTThe objectives:●Explain the uses of the statement of financial position, thestatement of comprehensive income and the statement of cash flows.●Identify the major classifications of the statement offinancial position, the statement of comprehensive income and the statement of cash flows.●Prepare a classified statement of financial position,statement of comprehensive income and statement of cash flows.The key point:Be clear about the structures of three main financial statements:✧Statement of financial position✧Statement of comprehensive income✧Statement of cash flowsTeaching method:InstructionPeriod division:Total 6periods.Content:I.Key words:✧Biological assets 生物资产英[,baɪə'lɒdʒɪkl]美[,baɪə'lɑdʒɪkl]adj. 生物学的；生物的；与生物学相关的；有血亲关系的n. [药]生物制品，生物制剂✧Non controlling interest (NCI) 非控制权益✧Utilities 公共事业英[ju:'tɪlɪtɪz] 美[ju'tɪlɪtɪz]n. [经济学]效用（utility的名词复数）；实用；公用事业；神庙逃亡游戏中的一次性道具✧Distribution cost 销售成本英[,dɪstrɪ'bju:ʃn] 美[,dɪstrə'bjuʃən]n. 分配，分布；[法]（无遗嘱死亡者的）财产分配；[无线]频率分布；[电]配电✧Administrative expenses 管理费用英[əd'mɪnɪstrətɪv] 美[əd'mɪnɪstreɪtɪv]adj. 管理的，行政的；行政职位；非战斗性行政勤务的✧Finance cost 财务成本英['faɪnæns] 美[fə'næns, faɪ-, 'faɪ,næns]n. 财政；金融；财源；资金vt. 为…供给资金，从事金融活动；赊货给…；掌握财政✧Performance 业绩英[pə'fɔ:məns] 美[pər'fɔrməns]n. 表演；演技；表现；执行✧Earnings per share (EPS) 每股盈余英['ɜ:nɪŋz] 美['ɜrnɪŋz]n. 收入，所得；工资，报酬；收益，利润✧Liquidity 流动性，偿债能力英[lɪ'kwɪdəti] 美[lɪ'kwɪdɪti]n. 流动性；流动资金；资产流动性；<财>资产折现力✧Solvency 偿付能力英['sɒlvənsi] 美['sɑlvənsi]n. <化>溶解状态，溶解力；偿付能力✧Operating activity 经营活动英['ɒpəreɪtɪŋ]美['ɑpə,retɪŋ]adj. 操作的；营运的；业务上的；外科手术的v. 操作( operate的现在分词)；运转；管理；做外科手术英[æk'tɪvəti] 美[æk'tɪvɪti]n. 活动；活跃，敏捷；活动力；教育活动✧Investing activity 投资活动英[ɪnvestɪŋ] 美[ɪnvestɪŋ]v. 投资，花费( invest的现在分词)；授予；（把资金）投入；投入（时间、精力等）✧Financing activity 筹资活动[fai'nænsiŋ]n. 筹措资金；理财；筹集资金；融资v. 为…供给资金，从事金融活动( finance的现在分词)II.IAS1 Presentation of financial statementsShows the objective of financial statements is to provide information about the financial position, financial performance, and cash flows of an entity that is useful to a wide range of users in making economic decisions. To meet that objective, financial statements provide information about an entity’s:✧Assets✧Liabilities✧Equity✧Income and expenses, including gains and losses✧Contributions by and distributions to owners✧Cash flowsIAS1 presentation of financial statement requires the components of a complete set of financial statement are:✧Statement of financial position✧Statement of comprehensive income✧Statement of cash flows✧Statement of changes in equity✧Note, including a summary of significant accountingpolicies and other explanatory information.✧Statement of financial position at the beginning of theearliest comparative period when an entity applies anaccounting policy.III.Statement of financial position 财务状况表1.The journal entries of main business transactionsa)Sales of goodsb)Purchase of inventory for resalec)Purchase of non-current assetsd)Payment of expenses such as utilitiese)Introduction of new capital to the businessf)Distribution of dividendsDetails refer to page113-114.2.Items in the statement of financial positionThe standard specifies minimum headings (if they exist at the date of financial statement) to be presented on the face of the balance as follows:a)Property, plant and equipment(PPE).b)Investment property.c)Intangible asset.d)Financial asset.e)Biological assets.f)Inventory.g)Trade and other receivables.h)Cash and cash equivalents.i)Trade and other payables.j)Provisions.k)Financial liabilities.l)Current tax.m)Deferred tax.n)Non controlling interest (NCI).o)Capital and reserves.IV.Statement of comprehensive income 综合收益表Minimum items on the face of the statement ofcomprehensive income should include:a)Revenue.b)Finance costs.c)Share of the profit or loss of associates and jointventures.d)Pre-tax gain or loss recognized on the disposal ofassets etc.e)Tax expense.f)Profit or loss.g)Each component of other comprehensive incomeclassified by nature.h)Profit or loss for the period attributable tonon-controlling interests and owners of the parent.i)Total comprehensive income attributable tonon-controlling interests and owners of the parent. V.Statement of cash flows 现金流量表i.Three classifications of statement of cash flows●Operating activities （relating to the main revenue producing activities）a.Cash receipts from the sale of goods and the rendering of servicesb.Cash receipts from royalties (e.g. franchising, licensing), fees,commissions and other revenuec.Cash payments to suppliers for goods and servicesd.Cash payments to and on behalf of employeese.Cash payments of taxes etc.●Investing activities (acquisition and disposition of PPE and othernon-current assets, which are not for the trading purposes)a.Cash payments to acquire property, plant and equipment, intangibles andother non-current assetb.Cash receipts from sales of property, plant and equipment, intangibles andother non-current assetc.Cash payments to acquire debt and equity instrument of other entities.d.Cash receipts from disposal of debt and equity instrument of other entities,etc.Financing activities (obtaining resources from owners or through borrowings and returning resources to the owners)Cash receipts from customers Xa.Cash proceeds from issuing shares.b.Cash payments to owners to acquire or redeem the entity’s shares.c.Cash proceeds from issuing debentures, loans, notes, bonds and otherborrowings.d.Cash repayments of amounts borrowed, etc.ii.Direct and indirect method for calculating cash from operation activities1.Direct methodThe direct method shows each major class of gross cash receipts and gross cash payments. It is the simply way to extract the information from the accounting record.The operating cash flows section of the statement of cash flows under the direct method would appear something like this:Cash paid to suppliers(X)Cash paid to employees(X)Cash paid for other operating expenses(X)Interest paid(X)Income taxes paid(X)Net cash from operating activities X2.Indirect methodThe indirect method adjusts accrual basis net profit or loss for the effects ofnon-cash transactions.The operating cash flows section of the statement ofcash flows under the indirect method would appear something like this:Operating profit (income statement) X Add depreciation X Loss (profit) on sale of non-current assets X (Increase)/decrease in inventories(X)/X (Increase)/decrease in receivables(X)/X Increase/(decrease) in payables X/(X) Cash generated from operations X Interest (paid) (X) Income taxes paid (X) Net cash flows from operating activities X 3.The reasons why certain items are added and others subtracted are asfollows:a.Expense which not generate cash outflowSuch as depreciation and amortisation is not a cash expense, but has been deducted in arriving at the profit figure. Therefore, to eliminate it by adding it back.b.Expense which not involved in the operating activitiesSuch as a loss on disposal of a non-current asset needs to be added back and a profit deducted.c.Changes of current asset except cash●we have spent cash on buying inventory so the increase in inventoriesmeans less cash.●An increase in receivables means the company’s debtors have not beenpaid as much, and therefore there is less cash.d.Changes of current liabilityIf we pay off payables by cash, causing the amount of payable to decrease, again we have less cash.Summary:Students should be familiar with the detail frame of the three main financial statements. Especially the statement of cash flow, because the content within the cash flow statement is notAccounting English Unit 9 FINANCIAL STATEMENT only simple as the cash payment and cash receipt.STATEMENT OF CASH FLOWSThe objectives:●Explain the uses of the statement of cash flows.●Identify the major classifications of the statement of cash flows.●Prepare a classified statement of cash flows.The key point:Be clear about the structures of the statement of cash flows:✧Operating activities✧Investing activities✧Financing activitiesTeaching method:Instruction, illustration, discussionPeriod division:Total 6periods.Content:Summary:Students should be familiar with the three classifications of cash flow statement. Especially the reasons of the addings and deductions for the operating cash flows under indirect method.11 / 11。