Chapter12- Financial Statement Analysis

Chapter12- Financial Statement Analysis - BUSI 1004...

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1 BUSI 1004 INTRODUCTION TO FINANCIAL  ACCOUNTING Chapter 12- Financial Statement Analysis
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Objective Compute and use various ratios to assess liquidity, solvency, profitability and asset management.
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Agenda Introduction Ratios analysis Liquidity Solvency Profitability Asset Management Limitations of ratio analysis 3
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Shareholders Financial Statement Analysis- Introduction Creditors Management Will I be paid? How good is our investment ? How are we performing? Objective = enable a user to make predictions about the firm that will assist his/her decision making
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Ratios analysis Evaluate the firm’s financial strength: Liquidity : nearness to cash, ability of the firm to pay current debt Solvency : ability of the firm to pay both current and long-term debt Evaluate the management performance Profitability : evaluation of managers’ ability in generating returns to capital providers Asset management : how well are the firm’s assets managed
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This note was uploaded on 01/26/2012 for the course BUSI 1004 taught by Professor Ouafasakka during the Spring '11 term at Carleton CA.

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Chapter12- Financial Statement Analysis - BUSI 1004...

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