ch18 - CHAPTER 18 Financial Statement Analysis ASSIGNMENT...

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18-1 CHAPTER 18 Financial Statement Analysis ASSIGNMENT CLASSIFICATION TABLE Study Objectives Questions Brief Exercises Exercises Problems 1. Discuss the need for comparative analysis. 1, 2, 3, 5 1 2. Identify the tools of financial statement analysis. 2, 3, 5, 6 2 3. Explain and apply horizontal analysis. 3, 4, 5 2, 3, 5, 6, 7 1, 3, 4 4. Describe and apply vertical analysis. 3, 4, 5 2, 4, 8 2, 3, 4 1 5. Identify and compute ratios used in analyzing a firm’s liquidity, profitability, and solvency. 5, 6, 7, 8, 9, 10, 11,12, 13, 14, 15, 16, 17, 18, 19 2, 9, 10, 11, 12, 13 5, 6, 7, 8, 9, 10, 11 1, 2, 3, 4, 5, 6, 7 6. Understand the concept of earning power, and how irregular items are presented. 20, 21, 22, 23 14, 15 12, 13 8, 9 7. Understand the concept of quality of earnings. 24
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18-2 ASSIGNMENT CHARACTERISTICS TABLE Problem Number Description Difficulty Level Time Allotted (min.) 1 Prepare vertical analysis and comment on profitability. Simple 20–30 2 Compute ratios from balance sheet and income statement. Simple 20–30 3 Perform ratio analysis, and evaluate financial position and operating results. Simple 20–30 4 Compute ratios, and comment on overall liquidity and profitability. Moderate 30–40 5 Compute selected ratios, and compare liquidity, profitability, and solvency for two companies. Moderate 50–60 6 Compute numerous ratios. Simple 30–40 7 Compute missing information given a set of ratios. Complex 30–40 8 Prepare income statement with discontinued operations and extraordinary loss. Moderate 30–40 9 Prepare income statement with nontypical items. Moderate 30–40
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BLOOM’S TAXONOMY TABLE 18-3 Correlation Chart between Bloom’s Taxonomy, Study Objectives and End-of-Chapter Exercises and Problems Study Objective Knowledge Comprehension Application Analysis Synthesis Evaluation 1. Discuss the need for comparative analysis. Q18-1 Q18-2 Q18-3 Q18-5 BE18-1 2. Identify the tools of financial statement analysis. Q18-6 BE18-2 3. Explain and apply horizontal Q18-4 BE18-3 BE18-5 BE18-6 BE18-7 E18-1 E18-3 E18-4 4. Describe and apply vertical BE18-4 BE18-8 E18-2 P18-1 5. Identify and compute ratios used in analyzing a firm’s liquidity, profitability, and solvency. Q18-8 Q18-7 Q18-9 Q18-10 Q18-11 Q18-12 Q18-13 Q18-14 Q18-15 Q18-16 Q18-17 Q18-18 Q18-19 BE18-9 BE18-10 E18-6 E18-7 E18-8 E18-9 E18-10 P18-2 P18-3 P18-6 BE18-11 BE18-12 BE18-13 E18-5 E18-11 P18-4 P18-5 P18-7 6. Understand the concept of earning power, and how irregular items are presented. Q18-20 Q18-21 Q18-22 Q18-23 BE18-14 BE18-15 E18-12 E18-13 P18-8 P18-9 7. Understand the concept of quality of earnings. Q18-24 Broadening Your Perspective Communication Decision Making Across the Organization Financial Reporting Comp. Analysis Exploring the Web Ethics Case All About You
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18-4 ANSWERS TO QUESTIONS 1. (a) Juan is not correct. There are three characteristics: liquidity, profitability, and solvency. (b) The three parties are not primarily interested in the same characteristics of a company. Short-term creditors are primarily interested in the liquidity of the enterprise. In contrast, long-term creditors and stockholders are primarily interested in the profitability and solvency of the company.
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This note was uploaded on 04/15/2010 for the course ACCOUNTING 1234 taught by Professor Ahmed during the Spring '10 term at Abu Dhabi University.

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ch18 - CHAPTER 18 Financial Statement Analysis ASSIGNMENT...

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