ch15 - Chapter 15 Chapter 15 15 15 Financial Statement...

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Chapter 15-1 Chapter Chapter 15 15 Chapter Chapter 15 15 Financial Statement Analysis
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Chapter 15-2 1. Discuss the need for comparative analysis. 2. Identify the tools of financial statement analysis. 3. Explain and apply horizontal analysis. 4. Describe and apply vertical analysis. 5. Identify and compute ratios used in analyzing a firm’s  liquidity, profitability, and solvency. Study Objectives Study Objectives Study Objectives Study Objectives
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Chapter 15-3 Balance Balance sheet sheet Income Income statement statement Retained Retained earnings earnings statement statement Basics of Basics of Financial Financial Statement Statement Analysis Analysis Basics of Financial Statement Statement Analysis Analysis Horizontal and Horizontal and Vertical Vertical Analysis Analysis Horizontal and Horizontal and Vertical Analysis Ratio Analysis Ratio Analysis Ratio Analysis Need for Need for comparative comparative analysis analysis Tools of Tools of analysis analysis Liquidity Liquidity Profitability Profitability Solvency Solvency Summary Summary Financial Statement Analysis Financial Statement Analysis Financial Statement Analysis Financial Statement Analysis
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Chapter 15-4 Analyzing financial statements involves: Basics of Financial Statement Analysis Basics of Financial Statement Analysis Basics of Financial Statement Analysis Basics of Financial Statement Analysis Characteristics Comparison  Bases Tools of  Analysis Liquidity Profitability Solvency Intra company  Industry averages  Inter company  Horizontal Vertical Ratio SO 1 Discuss the need for comparative analysis. SO 2 Identify the tools of financial statement analysis.
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Chapter 15-5 SO 3 Explain and apply horizontal analysis. Horizontal Analysis Horizontal Analysis Horizontal Analysis Horizontal Analysis Horizontal analysis , or  trend analysis , is a technique for  evaluating a series of financial statement data over a period of time.  Purpose  is to determine the increase or decrease. Commonly applied to the:  balance sheet,  income statement, and  statement of retained earnings.
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Chapter 15-6 SO 3 Explain and apply horizontal analysis. Horizontal Analysis Horizontal Analysis Horizontal Analysis Horizontal Analysis Exercise:   The comparative condensed balance sheets of Ramsey Corporation  are presented below. Instructions:   Prepare a  horizontal analysis  of the balance sheet  data for Ramsey Corporation using 2008 as a base. 2009 2008 Current assets 76,000 $ 80,000 $ PP&E 99,000 90,000 Intangibles 25,000 40,000 Total assets 200,000 $ 210,000 $ Current liabilities 40,800 $ 48,000 $ Long-term liabilties 143,000 150,000 Stockholders' equity 16,200 12,000 Total liabilities & equity 200,000 $ 210,000 $
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Chapter 15-7 SO 3 Explain and apply horizontal analysis.
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