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A host of vital questions on all aspects of your company's financial activities, giving both internal and external stakeholders a comprehensive snapshot.
If a single customer generates a high percentage of your revenues, you could face financial difficulty if that customer stops buying.
First Statement: Investing involves the purchase of assets with the intent of holding them for the long term. Second Statement: Speculation involves attempting to capitalize on market inefficiencies for short-term profit.
This represents uncollected revenues the company expects to receive within one year.
The following common size income statement are available for A.M.Y Corporation for two years ended December 31, 2019, and 2018: 2019 2018 The trend percentages for sales are as follows: Sales 100% 100% 2017 130% Cost of sales 55 70 2016 100% Gross profit 45 30 Operating expenses 20 18 Net income 25% 12% What should be the trend percentage for gross profit on sales for 2019?
Interested parties use ratio analysis to find information about the following: I. Profitability of the business firm/ II. The firm’s ability to meet its obligations III. Safety of the investment in the business IV. Effectiveness of management in running the firm
Operating profit margin measures the percentage of each peso sales remaining after
A report published yearly by all publicly-held companies that details the financial condition of the company and includes the balance sheet, income statement, cash flow statement, and other relevant information.
According to Dr. Dubos J. Masson, to effectively analyze the financial statements of a firm, it requires an understanding of three key areas, except
These are agreements to buy or sell a specific quantity of a commodity at a specified price on a particular date in the future.
This means that the data can be measured and stated in a numerical way.
What does "Short Selling" mean?
This is commonly cited measure of the firm's success with respect to the earnings on sales.
This ratio of analytical measurement measures the productivity of assets regardless of capital structures.
Assets the company plans to convert to cash, sell, or use during the coming year, including cash, accounts receivable, and inventory on hand.
They are the users of funds I. Lenders II. Borrowers III. Savers IV. Investors V. Intermediary
It is preferable to use audited financial statements for ratio analysis.
Assets that the company does not plan to turn into cash within one year or that would take longer than one year to convert, including property, plants, machinery, and patents.
In vertical analysis all the items in a particular statement are represented as a percentage of a particular item.
The place where buyers and sellers meet to decide on the price to buy or sell equity securities,usually with the assistance of a broker.
This measures how efficiently you manage the credit you extend to customers.
Operating expenses don't include _____ or taxes.
What does the bear and the bull stand for?
Technical analysis is based on the assumption that stock prices don't necessarily reflect the true intrinsic value of the underlying business.
First statement: Investment banks do not take deposits.
Southern Division reported the following results for 2019 Annual sales P 5,000,000 Net earnings 800,000 Investment 2,500,000 What is the Southern Division’s return on sales
The debt ratio of 35 percent indicates that the company has financed more than half of its assets with debt.
Value stocks are usually traded below the market price. They are considered having the low-term potential growth because of long-term growth of company associated with the stocks.
This measures the percentage of each sales dollar remaining after the firm has paid for its goods.
_______________________ (revenues – cost of goods sold – operating expenses) ÷ revenues
They are considered users of funds I. Lenders II. Borrowers III. Savers IV. Investors V. Intermediary
There's no set rule in regards to how much debt is too much, but if a company's debt to __________ is significantly higher than its peers, it could be a sign of a higher-risk investment.
These are shares in large, well-known companies with a solid history of growth. They generally pay dividends.
The definitions of debt and equity can vary, but generally this indicates how much leverage you're using to operate.
All costs incurred in operating the business that are not directly related to the production and storage of a company's goods.
_____ addresses your ability to generate sufficient cash to cover cash expenses.
A searchable database developed by the SEC that includes all documents and reports filed by U.S. publicly-traded companies since mid-1995.
Amy Corporation’s stockholders’ equity at December 31, 2019, consisted of the following: Preferred stock, P 50 par value, 10% noncumulative; 100,000 shares issued and outstanding P 5,000,000 Common stock, P 10 par value, 800,000 shares Issued and outstanding 8,000,000 Retained earnings 3,000,000 The preferred stock has a liquidating value of P 55 per share. At December 31,2019 the book value per share of common stock is
An item included on the income statement of production companies, calculated by deducting cost of goods sold from revenues/sales generated from those goods.
Represents all interest paid by the company for loans it incurred and is part of the expenses deducted from revenues in the process of arriving at net income on the income statement.
In CAMEL rating system, banks that are given scores greater than three are considered to be high-quality institutions.
Horizontal, vertical, and common-size analyses are techniques that are used by analysts in understanding the financial statements of companies. Which of the following is an example of vertical, common-size analysis?
Norte Company reported the following results for 2019: Annual sales P5,000,000 Net earnings 800,000 Investment 2,500,000 What is Norte Company’s asset turnover?
Earnings left after subtracting the cost of goods sold and operating expenses from a company's revenues on the income statement.
This is another ratio that compares the yearly dividend to a share price.
Horizontal analysis is also referred to
Southern Division reported the following results for 2019 Annual sales P 5,000,000 Net earnings 800,000 Investment 2,500,000 What is the Southern Division’s return on sales
Return on assets often called
Asset quality covers an institutional loan's quality, which reflects the earnings of the institution.
The security futures contract specifications include
A grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds is called
In Accrual Accounting System, earned revenues may include ___________ for which you have yet to receive cash and expenses may include bills that you have not yet paid.
When securities are issued and offered by the corporation for the first time to the public, buyers of such issues are referred to
Which statement about blue chips stocks is correct?
The ratio that measures the proportion of total assets financed by the creditors
Liquidity, activity and debt ratios primarily measure return.
The average sales per day equals annual sales divided by twelve months.
This commonly measures the activity, or liquidity of a firm's inventory
The quick ratio provides better measure of liquidity only when a firm's inventory cannot be easily converted into cash.
This method is used when preparing the cash flow statement.
First statement: Investing in government bonds means you are lending money to the government. Second statement: Investing in government bonds means that you are borrowing money from the government
A company's book value is the _____________ of the value of its assets.
First statement: As profit margin increases, every sale will bring more money to a company’s bottom line, resulting in a higher overall return on equity. Second statement: As asset turnover increases, a company will generate more sales per asset owned, resulting in a higher overall return on equity.
The data that relates to the quality or character of something, such as how well a company is managed or whether a company has poor customer satisfaction ratings.
When calculating revenue growth, don't include one-time revenues, which can distort the analysis.
This is an indirect analysis of a company's use of debt to finance its assets. This is also called equity multiplier.
How many types of stocks there are?
In using CAMEL rating system, banks that are given an average score of less than two are considered to be less-than-satisfactory.
First statement: Penny stocks do not pay dividends and are highly speculative Second statement: Corporations raise funds by selling preferred and common stock to individuals; and other investors who are owners or shareholders in the firm.
It involves methods of calculating and interpreting financial ratios to analyze and monitor firm's performance
The quantity, quality, and timing of revenues can determine long-term success.
Penny stocks refer to low-priced stock investments. These stocks are usually traded in stock exchange.
The following are the qualitative factors for stock analysis, except
The very lowest priced stocks are known as
An ask and bid is the ______ price and _________ price.
First statement: Decrease in financial leverage will lead to an increase in return on equity. Second statement: By splitting ROE into three parts, companies can more easily understand changes in their returns on equity over time.
First statement: As profit margin decreases, every sale will bring more money to a company’s bottom line, resulting in a higher overall return on equity.
A higher times interest ratio indicates greater capacity to meet scheduled payments.
This is a company engaged in the business of dealing with financial and monetary transactions such as deposits, loans, investments, and currency exchange.
The bottom line of the income statement.
Southern Division reported the following results for 2019 Annual sales P 5,000,000 Net earnings 800,000 Investment 2,500,000 What is Southern Division’s return on investment?
Decrease in financial leverage will lead to an increase in return on equity.
First statement: The majority of investment fund assets belong to close-end mutual funds. Second statement: Close-end funds are managed investment funds that issue a fixed number of shares, and trade on an exchange.
They use financial statement analysis to ensure the compliance of publicly traded companies to various rules and regulations.
Different costs, such as cost of goods sold, operating expenses, and interest expense, incurred during the normal operation of a business.
First statement: When you invest in corporate bonds, it means that you are borrowing money to a corporation. Second statement: Corporate bonds are sometimes called long-term commercial papers.
It is recorded as part of current liabilities on the balance sheet.
First statement: If the stock’s intrinsic or fair market value is higher than the current price on the market, then the stock is said to be undervalued. Second statement: If the fair market value is lower than the price on the market, then it is “overvalued.
Debts a company owes to its creditors and lenders.
The comparison of different firm's financial ratios at the same point in time is known as
Financial statements presenting financial data for two or more periods are called
Also known as Cost of Goods Sold, this represents all the expenses directly related to the making and storing of a company's goods, such as raw materials, warehousing, and direct labor costs.
First statement: Assessing asset quality involves rating investment risk factors that the company may face and comparing them with the company's capital earnings. Second statement: Asset quality covers an institutional loan's quality, which reflects the earnings of the institution.
This measures how efficiently you manage inventory.
The most commonly cited financial ratio that measures the firm's ability to measure its short-term obligations is
One important distinction is that fundamental analysis is typically intended to find long-term investment opportunities, while technical analysis is often geared toward profiting from short-term _____.
The place where buyers and sellers meet to decide on the price to buy or sell securities,usually with the assistance of a broker is called
Selected information from the operating records of Kaya Company is as follows: Net sales P 1,800,000 Cost of goods sold for 2019 1,200,000 Inventory at 12/31/2018 360,000 Inventory at 12/31/2019 312,000 Kay’s inventory turnover for 2019 is
A company-sponsored retirement account that employees can contribute to
In times interest earned ratio, the higher its value, the better for the firm to fulfill its interest obligations.
First statement: If inventory is liquid, the quick ratio is the preferred measure of overall liquidity.
It involves the conversion of items appearing in financial statement columns into terms of percentages of a base figure to show the relative significance of the items to facilitate comparison.The percentage is computed by using this formula: Percentage of base = Amount of individual item x 100 Amount of base
Stocks are
In 2018, ASB Corporation’s net income was P 1,600,000 and in 2019 it was P 400,000. What percentage increase in net income must ASB achieve in 2020 to offset 2019 decline in net income?
For example, if a stock trades for $30.00 and the company's earnings were $2.00 per share over the past year, we'd say it traded for a P/E ratio of 15, or "______________."
The data that relates to the quality or character of something, such as how well a company is managed or whether a company has poor customer satisfaction ratings
It is used to measure the flow of volume of stocks in positives and negatives over a period of time.
Revenues are probably your business's main source of cash.
The following are the categories of financial ratios, except
Fundamental analysts focus more on quantitative measures listed below, except
The breadth of the market shows:
Under this system, revenues are recorded when earned and expenses are recorded when incurred.
A method of arriving at net operating cash flow by adjusting the net income on the income statement for non-cash revenues and expenses.
First statement: The borrower is the bond holder. Second statement: The lender is the bond issuer.
A method used to account for the diminishing value of an asset over the time it is used and to match profit with the expenses it took to generate that profit.
The value of everything a company uses to conduct business, such as cash, equipment, land, inventories, office equipment, and money owed to the company by customers and clients.
Book value refers to:
Also known as Cost of Sales, this represents all the expenses directly related to the making and storing of a company's goods, such as raw materials, warehousing, and direct labor costs.
A financial statement that gives a snapshot of a company's financial situation at a particular point in time and lists its different assets, liabilities, and owners' equity.
A method of arriving at net operating cash flow by adjusting each item on the income statement from the accrual basis of accounting to the cash basis of accounting.
A firm's market value per share of P 3.50 means that the investors are paying P 3.50 for each P 1.00 of the firm's stock.
To assess a company's liquidity, the examiners should
Earnings per share is the peso amount earned on behalf of each share outstanding.
The risk that the issuer may fail to make timely interest or principal payments and thus default on its bonds is known as
An institution's ability to create appropriate returns to be able to expand, retain competitiveness, and add capital is a key factor in rating its continued viability.
The most informative approach to ratio analysis combines cross-sectional and time series analyses.
ROE tells us how efficiently a company is using its ____________ to earn a profit, and like most metrics, is useful for comparing companies in the same industry.
It refers to the amount of money for investing for a particular purpose.
Price to Book Ratio or P/B
First statement: Common stockholders can attend at annual general meeting to cast vote or use a proxy. Second statement: Noncumulative preferred stock is preferred stock for which the right to receive a basic dividend accumulates if the dividend is not paid.
Market ratios capture both risk and return.
This used valuation metrics and other information about a company's business in order to determine whether a stock is attractively priced.
The class of stock issued by all corporations and which represents the real equity account capital is
Shares in very small companies are sometimes called
Money invested in a company by its owners/shareholders.
The assessment and evaluation of the firm's past performance, present condition, and future business potential is generally known as
The primary purpose of investment banks and investment companies is making loans to its members, usually for the purchase of real estate or homes.
First statement: If the stock’s intrinsic or fair market value is higher than the current price on the market, then the stock is said to be "undervalued". Second statement: If the fair market value is lower than the price on the market, then it is “overvalued".
Cash used for investing in long-term assets, such as equipment or equity securities, and cash received from the sale of such investments.
These are some of the tools that professional analysts use to look at a company’s fundamentals, except
First statement: Technical analysts believe that stock prices move in trends. Second statement: Fundamental analysts usually look at the supply and demand for a particular stock in the market and identify patterns.
By analyzing a stock's price history, _____believe you can predict its future price behavior.
They are interested to know company’s ability to pay dividend, and growth of dividends and maximize their wealth.
A financial ratio based on the return on equity ratio that is used to analyze a company’s ability to increase its return on equity.
Revenue growth (___________________ - revenue last period) ÷ revenue last period
A lack of _____ leads to smaller profits and weaker growth.
___________________ equips with the potential of a superior level of earnings in the future. The earnings are used for reinvestment in order to maintain the growing trend of these stocks. Therefore, growth stocks do not pay dividends.
In this financial statement analysis, trend percentages are computed by taking a base year and assigning its figures as a value of 100.
For example, a stock with a P/E ratio of 20 and 10% expected earnings growth over the next five years would have a PEG ratio of __________.
Revenue per employee (_____________ ÷ average number of employees)
These ratios give insight into how well investors in the market place feel the firm is doing in terms of risk and return.
Tax levied by the government for income and part of the expenses deducted from revenues when arriving at net income on the income statement.
Gross profit margin (revenues – _________________) ÷ revenues
A single ratio is already enough to provide sufficient information to judge the overall performance of the firm.
By splitting ROE into three parts, companies can more easily understand changes in their returns on equity over time.
A financial statement that specifies the financial results of a business over a defined period of time and lists the revenue, expenses, and net income of the business.
What is the Stock Market?
The magnification of risk and return through the use of fixed cost financing, such as debt and preferred stock is called
A financial institution (FI) is a company engaged in the business of dealing with financial and monetary transactions such as deposits, loans, investments, and currency exchange.
If the inventory is liquid, the quick ratio is the preferred measure of overall liquidity.
As asset turnover increases, a company will generate more sales per asset owned, resulting in a higher overall return on equity.
The class of stock which has a claim on assets before common stock is known as
First statement: Understanding fundamental analysis is necessary to determine whether a stock is valued correctly in the market. Second statement: Analysts typically look at macro and micro factors to identify stocks that are trading at higher and lower prices.
This refers to the risk that investors won’t find a market for the bond, potentially preventing them from buying or selling when they want.
A company's ______________ should also be taken into consideration when analyzing its stock, and one good way to gauge financial health is by looking at the company's debts.
The 10 percent return on assets indicates that that company earned 10 centavos on each peso of asset invested.
First statement: Liquidity, activity and debt ratios primarily measure return.
When a firm compare its ratio values to those of a key competitor or group of competitors, this analysis is known as
Fundamental analysis generally assumes that a stock's price reflects all available information and that prices generally move according to trends.
This involves comparison of current to past performance, using ratios, enables analysts to assess the firm's progress.
This commonly measures the activity, or liquidity of the firm's inventory
If the corporation issued only one kind of stock, it should be
Category of stocks that pay dividends consistently
Net profit margin measures
Below shows the current assets and current liabilities of Tala Company ASSETS LIABILITIES Current Assets Current Liabilities Cash P 2,550,000 Accounts payable P 9,500,000 Marketable securities 2,000,000 Short-term bank loan 11,375,000 Accounts receivable 16,675,000 Total current liabilities P 20,875,000 Inventories 26,470,000 Total current assets P 47,695,000 Tala’s current ratio is
The main reasons to use common-size analysis are enumerated below, except I. to evaluate information from one period to the next within a company II. to evaluate a company relative to its competitors. III. to evaluate the trend situation
Below shows the current assets and current liabilites of Tala Company ASSETS LIABILITIES Current Assets Current Liabilities Cash P 2,550,000 Accounts payable P 9,500,000 Marketable securities 2,000,000 Short-term bank loan 11,375,000 Accounts receivable 16,675,000 Total current liabilities P20,875,000 Inventories 26,470,000 Total current assets P 47,695,000 Tala’s current ratio is
Think of book value as the amount of money a company would theoretically have if it _____________its business and sold everything it owned – tangible property as well as things like patents, brand names, etc.
Selected information from the operating records of Kaya Company is as follows: Net sales P 1,800,000 Cost of goods sold for 2019 1,200,000 Inventory at 12/31/2018 360,000 Inventory at 12/31/2019 312,000 Kay’s inventory turnover for 2019 is
As profit margin increases, every sale will bring more money to a company’s bottom line, resulting in a higher overall return on equity.
The financial institution that is responsible for the oversight and management of all other banks is
Which of the following does not belong to the list?
This refers to putting money to work to start or expand a project or to purchase an asset or interest where those funds are then put to work, with the goal to income and increased value over time.
The Dupont analysis looks at three main components of the ROE ratio, except
It involves methods of calculating and interpreting financial ratios to analyze and monitor the firm's performance.
The public usually buy stocks from stock brokers.
First statement: Fixed annuities are regulated by state insurance commissioners. Second statement: In variable annuity, the insurance company allows to direct annuity payments to different investment options, usually mutual funds.
This annuity combines features of securities and insurance products.
It is recorded as part of current assets on the balance sheet.
In using CAMEL rating system, banks with scores greater than three are considered to be less-than-satisfactory.
It refers to the practice of financing assets with borrowed capital.
The ____________ takes a stock's P/E ratio and divides by the expected annualized earnings growth rate over the next few years.
Projected Earnings Growth or PEG
A higher number means your company is managing credit well; a lower number is a warning sign you should improve how you _____ from customers.
An investment is well-hedged if:
This is often used by short-term traders in search of quick profits, but is generally not well suited for long-term investors.
Stock analysis helps investors find the best investment opportunities at a given time.
Publicly traded companies report their profits to shareholders as earnings per share, or ____________ for short.
This term refers to the market dealing with the resale and purchase of securities or other titles to property or commodities.
Which of the following statements is incorrect?
They usually use financial statement analysis to analyze the efficiency of operations and make important business decisions.
Examiners should determine earnings by
What factors affect stock market?
First statement: Common stockholders can attend at annual general meeting to cast vote or use a proxy. Second statement: Non-cumulative preferred stock is preferred stock for which the right to receive a basic dividend accumulates if the dividend is not paid.
Horizontal analysis is also referred to common-size analysis.
This measures the efficiency with which the firm uses all of its assets to generate sales
Examiners assess institutions' capital adequacy through
Cash received or paid from borrowing money or paying back investors, creditors, and shareholders.
In 2018, ASB Corporation’s net income was P 1,600,000 and in 2019 it was P 400,000. What percentage increase in net income must ASB achieve in 2019 to offset 2018 decline in net income?
First statement: The statements for two or more periods are used in horizontal analysis. Second statement: In vertical analysis all the items in a particular statement are represented as a percentage of a particular item.
Southern Division reported the following results for 2019 Annual sales P 5,000,000 Net earnings 800,000 Investment 2,500,000 What is Southern Division’s asset turnover?
First statement: A single ratio is already enough in providing sufficient information to judge the overall performance of the firm.
One of the most commonly used profitability metrics, return on equity or ___________ is calculated by dividing a company's net income by its shareholders equity (assets minus liabilities).
This refers to the number of pesos earned during the period in behalf of each outstanding share of common stock.
Index numbers would probably be most interested in which ratio?
They are concerned with the company’s ability to pay interest and principal when due and are concerned with the company’s cash flow ability.
This represents the return investors are generating from your business.
These are assets held by an entity for accretion of wealth through distribution such as interest, royalties, dividends and rentals, for capital appreciation of for other benefits to the investing entity such as those obtained through trading relationships.
It's not good for the company to have higher gross profit margin.
The underlying assumption of fundamental analysis is that the price on the market does not reflect the stock’s actual value. This is called
A financial statement analysis technique that shows changes in the amounts of corresponding financial statement items over a period of time.
Investment banks do not take deposits.
A legally binding agreement between two parties to buy or sell a specific quantity of shares of an individual stock or a narrow-based security index at a specified price, on a specified date in the future.
They are the suppliers of funds I. Lenders II. Borrowers III. Savers IV. Investors V. Intermediary
The section on a company's website under which you can find the company's financial statements.
It includes three sections: operating cash flow, investing cash flow, and financing cash flow.
As profit margin decreases, every sale will bring more money to a company’s bottom line, resulting in a higher overall return on equity.
This is the best choice for investors looking for excellent long-term returns.
Predicting any company's future profits and future growth with accuracy is pretty easy.
Other terms for government bonds are enumerated below, except
Stocks that have earnings growing at a faster rate than the market average are called
If a company has P 10 million net income and 4 million outstanding shares, the earnings per share would be
Below shows the current assets and current liabilities of Tala Company ASSETS LIABILITIES Current Assets Current Liabilities Cash P 2,550,000 Accounts payable P 9,500,000 Marketable securities 2,000,000 Short-term bank loan 11,375,000 Accounts receivable 16,675,000 Total current liabilities P 20,875,000 Inventories 26,470,000 Total current assets P 47,695,000 What is the company's quick ratio?
The statements for two or more periods are used in horizontal analysis.
Lucena Corporation’s books disclosed the following information as of and for the year ended December 31, 2019: Net credit sales P 4,000,000 Net cash sales 1,000,000 Merchandise purchases 2,000,000 Inventory at beginning 1,200,000 Inventory at end 400,000 Accounts receivable at beginning 600,000 Accounts receivable at end 1,400,000 Net income 200,000 Marble’s percent of net income on sales is
This represents incurred expenses the company expects to pay within one year.
Comparative statements are
When the firm earns a profit even after making interest payments to creditors and paying dividends to preferred stockholders, the firm's use of leverage magnifies the return earned by common stockholders.
This method is used when preparing the income statement and balance sheet.
Assessing asset quality involves rating investment risk factors that the company may face and comparing them with the company's capital earnings.
If the firm extended 45-day credit term and their average collection period is 40 days, may indicate a poorly managed credit collection department.
A lower times interest earned ratio indicates greater capacity to meet scheduled payments.
Provides an assessment of how investors view firm's performance
The average collection period is meaningful only in relation to the firm's credit term.
Price to Earnings Ratio or P/E
First statement: The borrower is the bond holder. Second statement: the lender is the bond issuer.
This is what remains for reinvestment into your business and for distribution to owners in the form of dividends.
Insurance companies are financial institutions that
A.M.Y. Company is preparing its common-size financial statements and revealed the following: (in thousands of pesos) Accounts receivable 20,000 Inventory 40,000 Total current assets 70,000 Total assets 168,000 Bonds payable 42,000 Retained earnings 14,000 Sales revenue 150,000 Cost of goods sold 124,000 Income tax expense 22,000 How would A.M.Y.’s inventory appear on a common-size balance sheet?
First statement: Penny stocks do not pay dividends and are highly speculative Second statement: Corporations raise funds by selling preferred and common stock to individuals; and other investors who are owners or shareholders in the firm.
First statement: Fixed annuities are regulated by state insurance commissioners. Second statement: In variable annuity, the insurance company allows to direct annuity payments to different investment options, usually mutual funds.
Bonds are
First statement: It is preferable to use audited financial statements for ratio analysis.
Amount calculated by subtracting cost of goods sold and operating expenses from revenue on the income statement.
Lucena Corporation’s books disclosed the following information as of and for the year ended December 31, 2019: Net credit sales P 4,000,000 Net cash sales 1,000,000 Merchandise purchases 2,000,000 Inventory at beginning 1,200,000 Inventory at end 400,000 Accounts receivable at beginning 600,000 Accounts receivable at end 1,400,000 Net income 200,000 Marble’s percent of net income on sales is
This measures the efficiency with which the firm uses all its assets to generate sales.
An "illliquid market"is also called a thin market and is characterized by:
In this kind financial statement analysis, trend percentages are computed by taking a base year and assigning its figures as a value of 100.
First statement: A lower times interest earned ratio indicates greater capacity to meet scheduled payments.
The analytical tools used in financial statement analysis are I. Comparative financial statements such as horizontal and vertical analysis II. Technical analysis III. Common-size financial statements IV. Trend analysis V. Fundamental analysis VI. Ratio analysis
An income statement showing only component percentages is known as
First statement: If the firm extended 45-day credit term and their average collection period is 40 days may indicate a poorly managed credit collection department.
No client should represent more than 10 percent of your total revenues.
When investing in a stock, your goal should be to pay a price that's less than the value of the company's future profits.
The flip side of fixed assets, this represents money the company needs to pay back in one or more years.
Stocks that have earnings growing at a faster rate than the market average.
To compute for debt ratio, you have to divide current assets by current liabilities.
A measure of the company’s long-term debt paying ability is
Revenue concentration (revenue from client ÷ ____________________)
This refers to putting money to work to start or expand a project or to purchase an asset or interest where those funds are then put to work, with the goal to income and increased value over time.
This contains more detailed information about a company's financials than the annual report and includes the three financial statements covered in this tutorial.
The first section of the cash flow statement, which includes cash generated by and required for the daily operations of a business.
As asset turnover decreases, a company will generate more sales per asset owned, resulting in a higher overall return on equity.
The following are debt ratios except
Financial statement analysis is used by this interested party to evaluate the attractiveness of the investment in the business.
The flip side of current assets, this is money the company expects to pay within one year and includes accounts payable and short-term borrowings.
This is commonly used to assess the owner's appraisal of share value.
A.M.Y. Company is preparing its common-size financial statements and revealed the following: (in thousands of pesos) Accounts receivable 20,000 Inventory 40,000 Total current assets 70,000 Total assets 168,000 Bonds payable 42,000 Retained earnings 14,000 Sales revenue 150,000 Cost of goods sold 124,000 Income tax expense 22,000 How’s would A.M.Y’s retained earnings appear on a common-size balance sheet?
_____ and solvency are of interest to lenders and investors.
The technique of securing funds for investment at a fixed rate of return to fund suppliers to enhance the well being of common stockholders.
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Entrepreneurship
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Business Research
Business Laws and Regulation
Shopee Helmet
Shopee 3D Floor
Lazada Smart TV Box
