Financial Analysis.ppt

Financial Analysis.ppt - Financial Analysis Financial...

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Financial Analysis
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Financial analysis can tell whether a firm has a  sustainable competitive advantage by comparing  the firm’s performance to the industry.
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Financial Ratios –  Key ratios  Liquidity, profitability, activity, leverage Comparisons to history, industry, competitors Trends –  Graph sales, profits, gross margin, expenses, debt,  ROI, etc. Look for changes over time both gradual and  sudden Ratio Analysis & Trend Analysis
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Cash flow from operations should  exceed   net  income One time circumstances that account for  earnings/profit Accounts receivable should not grow faster than  sales Special risks (e.g. a big customer or supplier) Gross margins should not fluctuate over time High debt Watch for Unique Situations
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Top management ownership Information about top management and the board  (e.g. membership, relationships)
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This note was uploaded on 02/12/2012 for the course BUS 450 taught by Professor Lui during the Spring '11 term at SUNY Suffolk.

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Financial Analysis.ppt - Financial Analysis Financial...

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