FFM12,_ch_04,_slides_rev

FFM12,_ch_04,_slides_rev - Analysis of Financial Statements...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Analysis of Financial Statements Chapter 4 Ratio Analysis DuPont System Effects of Improving Ratios Limitations of Ratio Analysis Qualitative Factors 4-1 Why are ratios useful? Ratios standardize numbers and facilitate comparisons. Ratios are used to highlight weaknesses and strengths. Ratio comparisons should be made through time and with competitors. Trend analysis. Peer (or industry) analysis. 4-2 Five Major Categories of Ratios and the Questions They Answer Liquidity: Can we make required payments? Asset management: right amount of assets vs. sales? Debt management: Right mix of debt and equity? Profitability: Do sales prices exceed unit costs, and are sales high enough as reflected in PM, ROE, and ROA? Market value: Do investors like what they see as reflected in P/E and M/B ratios?...
View Full Document

This note was uploaded on 07/27/2011 for the course ACCT 351A taught by Professor Robertwong during the Spring '11 term at University of San Francisco.

Page1 / 9

FFM12,_ch_04,_slides_rev - Analysis of Financial Statements...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online