chap003 - Chapter 3 FINANCIAL STATEMENTS ANALYSIS AND...

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Chapter 3 FINANCIAL STATEMENTS ANALYSIS AND LONG- TERM PLANNING SLIDES 3.1 Key Concepts and Skills 3.2 Chapter Outline 3.3 Financial Statements Analysis 3.4 Ratio Analysis 3.5 Categories of Financial Ratios 3.6 Computing Liquidity Ratios 3.7 Computing Leverage Ratios 3.8 Computing Coverage Ratios 3.9 Computing Inventory Ratios 3.10 Computing Receivables Ratios 3.11 Computing Total Asset Turnover 3.12 Computing Profitability Measures 3.13 Computing Market Value Measures 3.14 The Du Pont Identity 3.15 Using the Du Pont Identity 3.16 Calculating the Du Pont Identity 3.17 Using Financial Statements 3.18 Potential Problems 3.19 Long-Term Financial Planning 3.20 Financial Planning Ingredients 3.21 Percent of Sales Approach 3.22 Percent of Sales Approach 3.23 Percent of Sales and EFN 3.24 External Financing and Growth 3.25 The Internal Growth Rate 3.26 The Sustainable Growth Rate 3.27 Determinants of Growth 3.28 Some Caveats 3.29 Quick Quiz 3.30 Quick Quiz
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A-31 CHAPTER 3 CHAPTER WEB SITES Section Web Address 3.2 www.investor.reuters.com www.onlinewbc.gov www.edgarscan.pwcglobal.com 3.4 www.naics.com 3.5 www.planware.org End-of-chapter material www.mhhe.com/edumarketinsight CHAPTER ORGANIZATION 3.1 Financial Statements Analysis Standardizing Statements Common-Size Balance Sheets Common-Size Income Statements 3.2 Ratio Analysis Short-Term Solvency or Liquidity Measures Long-Term Solvency Measures Asset Management or Turnover Measures Profitability Measures Market Value Measures 3.3 The Du Pont Identity A Closer Look at ROE An Expanded Du Pont Analysis 3.4 Using Financial Statement Information Choosing a Benchmark Problems with Financial Statement Analysis 3.5 Long-Term Financial Planning A Simple Financial Planning Model The Percentage of Sales Approach 3.6 External Financing and Growth EFN and Growth Financial Policy and Growth A Note about Sustainable Growth Rate Calculations 3.7 Some Caveats Regarding Financial Planning Models
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CHAPTER 3 A-32 ANNOTATED CHAPTER OUTLINE Slide 3.0 Chapter 3 Title Slide Slide 3.1 Key Concepts and Skills Slide 3.2 Chapter Outline Lecture Tip: Students sometimes get the impression that accounting data is useless because care must be used when some of the results are interpreted. They sometimes ask why we bother with financial statement analysis at all. Robert Higgins provides a good answer to this question: “Objectively determinable current values of many assets do not exist. Faced with a trade-off between relevant, but subjective current values, and irrelevant, but objective historical costs, accountants have opted for irrelevant, but objective historical costs. This means that it is the user’s responsibility to make adjustments” Financial statement information is often our ONLY source of information. Consequently, we use the information we have and make adjustments where appropriate. 3.1.
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This note was uploaded on 12/21/2011 for the course NIKA 101 taught by Professor Temur during the Spring '11 term at Acton School of Business.

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chap003 - Chapter 3 FINANCIAL STATEMENTS ANALYSIS AND...

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