Module 3 Slidesx - Module 3 FINANCIAL STATEMENT ANALYSIS A WORD OF CAUTION BEFORE WE BEGIN While some financial ratios have established formulas

Module 3 Slidesx - Module 3 FINANCIAL STATEMENT...

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Module 3
FINANCIAL STATEMENT ANALYSIS
A WORD OF CAUTION BEFORE WE BEGINWhile some financial ratios have established formulas, others are quite fluid and can be computed in many different ways. For this reason, if you look for the formulas on the internet or in other textbooks, you may find slightly different formulas and obtain different results. For this course, we will use the Financial Ratios formulas outlined in this PowerPoint and summarized in the Financial Ratios Summary Sheet posted on Moodle. In some cases (e.g., Inventory Turnover), the denominator requires the average of two years. IF only one year worth of data is available, you may simply use one year. While there is a technical difference between Revenue and Net Sales, we will treat them as the same thing for this course.
FINANCIAL STATEMENT USERS AND THEIR QUESTIONSCustomers want to buy from companies that will:continue to produce goods or provide services in the futureprovide repair or warranty service if requiredEmployees need to know if a company provides:competitive salary and benefitsexperiences that will prepare you to assume increased responsibility

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