财务会计英语 unit9 Analyzing Financial Statements

Exercises
• 9.5 Vertical analysis involves the __up_-d_o_w_n ___ movement of our eyes as we review common size financial statements.
• 9.6 Common-size statements show the of the __p_er_ce_n_ta_ge_s__ parts to the total. A common-size percent is calculated by taking each individual financial statement amount under analysis and dividing it by its __b_as_e___ amount.
Financial Accounting English( Second Edition)
Section 2 Horizontal Analysis (水平分析)
Horizontal analysis compares amounts for two or more successive periods. It involves the left-to-right movement of our eyes as we view comparative financial statements. Horizontal analysis begins with the computation of changes from the previous year to the current year in both dollar amounts and percentages.
• 9.2 Financial statement analysis helps reduce _g_u_es_s_es_ and ___in_tu_iti_on__.
• 9.3 External users rely on financial statement analysis to make better and more _i_nf_or_m_ed__ decisions to pursue their own goals.
Financial Accounting English( Second Edition)
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 4 Ratio Analysis (比率分析) Working capital and current ratio (营运资本 比率和流动比率) Working capital is the amount of current assets less current liabilities.
Exercises • 9.8 Use vertical analysis to express the
comparative balance sheet. (Round computations to one decimal place.)
Financial Accounting English( Second Edition)
• 9.4 Horizontal analysis involves the __l_ef_t-t_o_-ri_gh_t_ movement of our eyes as we view comparative financial statements.
Financial Accounting English( Second Edition)
Financial Accounting English( Second Edition)
Section 2 Horizontal Analysis (水平分析) We compute the percent change by dividing the dollar change by the base period amount and then multiplying this quantity by 100:
Financial Accounting English( Second Edition)
Exercises
Financial Accounting English( Second Edition)
Exercises
Financial Accounting English( Second Edition)
Financial Accounting English( SAnalysis (水平分析) In the formula, analysis period is the point of time under analysis, and base period is the point of time used for comparison. Often the previous year is used as the base period.
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.
financialaccountingenglishsecondedition?31commonsizestatements百分比报表section3verticalanalysis垂直分析financialaccountingenglishsecondedition?32exampleofcommonsizefinancialstatements百分比财务报表实例exampleofcommonsizebalancesheet百分比资产负债表实例example92showsacommonsizecomparativebalancesheet百分比比较资产负债表forlottlawfirmexample92section3verticalanalysis垂直分析financialaccountingenglishsecondeditionexampleofcommonsizeincomestatement百分比利润表实例example93showsthecommonsizecomparativeincomestatement百分比比较利润表forlottlawfirmsection3verticalanalysis垂直分析financialaccountingenglishsecondeditionsection3verticalanalysis垂直分析financialaccountingenglishsecondeditionexercises?91financialstatementanalysishelpsusersmakebusinessdecisions
Section 3 Vertical Analysis (垂直分析)
• 3.2 Example of common-size financial statements (百分比财务报表实例) Example of common-size balance sheet (百分 比资产负债表实例) Example 9.2 shows a common-size comparative balance sheet (百分比比较资 产负债表) for Lott Law Firm. Example 9.2
Exercises
Financial Accounting English( Second Edition)
Exercises
Financial Accounting English( Second Edition)
Section 4 Ratio Analysis (比率分析)
• 4.1 Liquidity and efficiency ratios (流动比率和 效率比率) Liquidity refers to a company’s ability to meet short-term or unexpected cash needs. Efficiency refers to how productive a company is in using its assets.
Financial Accounting English( Second Edition)
Section 2 Horizontal Analysis (水平分析)
• 2.2 Example of dollar changes and percent changes An example of dollar and percent changes is given in the form of comparative financial statements for Lott Law Firm. In Example 1.4 and 1.5, Unit One and Example 4.3, Unit Four, we showed two financial statements for Lott Law Firm for its January and February operations. Example 9.1
Financial Accounting English( Second Edition)
Section 3 Vertical Analysis (垂直分析) • 3.1 Common-size statements (百分比报表)
Financial Accounting English( Second Edition)
Financial Accounting English( Second Edition)
Exercises
• 9.7 Use horizontal analysis to compute the amount and percentage changes for the income statement below, with the year 2006as the analysis period. (Round the percentage changes to one decimal place.)
Financial Accounting English( Second Edition)
Section 2 Horizontal Analysis (水平分析) • 2.1 Computation of dollar changes and percent changes (计算金额及百分比的变化) We can compute the dollar change for a financial statement item as:
Financial Accounting English( Second Edition)
Section 3 Vertical Analysis (垂直分析)
Financial Accounting English( Second Edition)
Exercises
• 9.1 Financial statement analysis helps users make __b_e_tt_er___ business decisions.
Financial Accounting English( Second Edition)
Section 1 Purpose of Financial Statement Analysis
The internal users of accounting information are managing executives and administrators in the company. External users are those who are not directly involved in operating the company.
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