S w Business 1220 Financial Management Study Sheet EVALUATING PAST PERFORMANCE Analyzing the Statement of Cash Flows: consider the following Was cash generated from operations? Is net income a source of cash? What are the sources and uses from operations? What are the remaining sources and uses? What does this mean for the business? Recommendations for the future? Analyzing Financial Ratios: consider the following What do these figures tell us about the financial health of the business? What is the root cause of the change? How does the company compare to industry standards? Recommendations for the future? Profitabilit y Vertical Analysis = Statement of Earnings Item Stability Net Worth to Total Assets = Total Equity Sales Total Assets Return on Average Equity = Earnings Debt to Equity = Total Debt (liabilities) Total Average Equity Total Equity Interest Coverage = EBIT Liquidity Current Ratio = Total Current Assets
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