Ch 5 and 14 - Ch 14 Analyzing Financial Statements The...

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Ch 5 Communicating and Interpreting Accounting Information Players in the Accounting Communication Process Regulators SEC FASB PCAOB Stock Exchanges Managers (CEO, CFO and Accounting Staff) Board of Directors (Audit Committee) Auditing Information Intermediaries (Financial analysts and Information Services) Users: Institutional and Private Investors, Creditors and other Stakeholders Guiding Principles for Communicating Useful Information Relevant Reliable Consistent Comparability Constraints Materiality Conservatism Disclosure Process Press Releases Annual Repots Quarterly Reports
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SEC Reports (10K, 10Q, 8K) Classified Balance sheet Classified Income Statements Statement of Stockholders ‘Equity Statement of Cash Flows Notes to the Financial Statements Return on Equity (DuPont) Analysis Net Profit Margin Asset Turnover (Efficiency) Financial Leverage Profit Drivers and Business Strategy High Value or Product Differentiation Low Cost Strategy
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Unformatted text preview: Ch 14 Analyzing Financial Statements The Investment Decision Economy wide factors Industry factors Individual company factors Understanding a Companys Strategy ROE = Net Profit Margin * Asset Turnover * Financial Leverage Product Differentiation Cost Advantage Ratio and Percentage Analyses Component Percentages Tests of Profitability Return on Equity ROE Return on Assets (ROA) Financial Leverage Percentage Earnings per Share (EPS) Quality of Income Profit Margin Fixed Asset Turnover Ratio Test s of Liquidity Cash Ratio Current Ratio Quick Ratio (Acid Test) Receivable Turnover Ratio Inventory Turnover Ratio Using Ratios to Analyze the Operating Cycle Tests of Solvency Times Interest Earned Ratio Cash coverage Ratio Debt to Equity Ratio Market Tests Price/Earnings (P/E) Ratio Dividend Yield Ratio Information in an Efficient Market...
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This note was uploaded on 04/16/2011 for the course ACC 311 taught by Professor Charrier during the Fall '08 term at University of Texas at Austin.

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Ch 5 and 14 - Ch 14 Analyzing Financial Statements The...

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