Class 11_30 & 12_01 - Ch 5 & 14

Class 11_30 & 12_01 - Ch 5 & 14 - Agenda...

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Page 1 Questions? Chapter 11 Practice Problem Chapters 5 / 14 Dinner at my house on 12/5 from 5:30 to 7:30 PM Let me know if you can make but have yet to send me a note Review Session – 12/5 from 8 – 10 PM; UTC 3.104 Evaluations Agenda
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Page 2 How do you evaluate how a firm has done relative to itself or others? Earnings Cash Flow Do these measures tell the entire story? Example: Two firms have the following results – Firm A Firm B Income $500 $1,000 Investment Required $2,500 $10,000 Which firm has the higher income? Which firm has the higher return? So, relative size matters. Therefore, we use common sized financial statements and ratios to lessen the impact of size. Financial Statement Analysis
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Page 3 Common Size Income Statement – Everything as a % of Sales; Allows us to compare income statement results across years and other firms Example: We can tell from the income statement that the firm has increased revenue and net income during this three year period – but how have they
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This note was uploaded on 12/17/2010 for the course ACC 311 taught by Professor Charrier during the Fall '08 term at University of Texas at Austin.

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Class 11_30 & 12_01 - Ch 5 & 14 - Agenda...

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