Financial Statement Analysis - Team D Final

Financial Statement Analysis - Team D Final - Running Head:...

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Running Head: FINANCIAL STATEMENT ANALYSIS 1 Financial Statement Analysis Barbara Anderson, Celaine Harrington, Myishia Smith, Pamela Spivey, and Kalyn Wenzlawsh ACC/561 Accounting 6/28/2001 Christa Gallop
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FINANCIAL STATEMENT ANALYSIS 2 Financial Statements Analysis Introduction to Analysis In many businesses today, accounting methodology is heavily scrutinized and looked at for the highest of integrity. There are several different methods that are used among large and small companies that can be beneficial to their needs and reporting for financial statements. In this paper, we will first demonstrate how differences in business industries affect the presentation of the financial statements. Second, we will demonstrate how the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) measurement conventions affect the presentation of financial statements. Finally, we will explain how the elements of the four financial statements are related. Company Information In determining the necessary accounting ratios, the equations found in Appendix A were used for each company. The information used in the following came from the 2009 financial data for all three companies. Manufacturing: Toyota The Toyota Company saw their share of disappointments due to recalls and the recession felt across the globe. The 2009 Financial Statements for Toyota are reported in yen. The quick liability ratio converted to .93 and the current liability ratio result was 1.1. The quick ratio was close to 1, in turn, telling investors not to give up on the company even though 2009 appeared to be a challenging. The current ratio indicates for every $1 owed by Toyota for the year, it had $1.10 to pay it off. Toyota saw some struggles in meeting their short-term obligations. Luckily their current assets reported for the year were a bit higher than their current liabilities. Some
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FINANCIAL STATEMENT ANALYSIS 3 options Toyota should consider: sell some fixed assets, liquidate inventory, or perhaps refinance its short-term debt with long-term debt. In the DuPont ratio the net profit margin was 2.28%, the asset turnover was 6.6%, which tells us how Toyota performed in turning their assets into sales. Their profit margin was a 16.7%, which outperformed the automotive industry leading the way over such US competitors as Ford and General Motors. The financial leverage was at 2.9, showing Toyota had the potential to do some damage-control. Service: UPS
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Financial Statement Analysis - Team D Final - Running Head:...

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