chapter3a - Chapter 3 Financial Statement Analysis Issues:...

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Chapter 3 Financial Statement Analysis Issues: How to compute and interpret important financial ratios Problems and pitfalls in financial statement analysis
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2 Ratio Analysis Ratios allow for better comparison through time or between companies As we look at each ratio, ask yourself what the ratio is trying to measure and why that information is important Categories of financial ratios: Short-term solvency or liquidity ratios Long-term solvency or financial leverage ratios Asset management or turnover ratios Profitability ratios Market value ratios
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3 Sample Balance Sheet Cash 680,623 A/P 318,301 A/R 1,051,438 N/P 4,613 Inventory 300,459 Other CL 1,645,748 Other CA 415,310 Total CL 1,968,662 Total CA 2,447,830 LT Debt 909,814 Net FA 3,415,159 C/S 2,984,513 Total Assets 5,862,989 Numbers in thousands
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4 Sample Income Statement Revenues 5,250,538 - Cost of Goods Sold (2,046,645) - Expenses (1,904,556) (124,647)
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This note was uploaded on 06/20/2010 for the course CB EF4441 taught by Professor Professorng during the Spring '10 term at 東京国際大学.

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chapter3a - Chapter 3 Financial Statement Analysis Issues:...

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