...Financial Statements Analysis - An Introduction MODULE - 6A Analysis of Financial Statements 27 FINANCIAL STATEMENTS ANALYSIS - AN INTRODUCTION You have already learnt about the preparation of financial statements i.e. Balance Sheet and Trading and Profit and Loss Account in the module titled ‘Financial Statements of Profit and Not for Profit Organisations’. After preparation of the financial statements, one may be interested in analysing the financial statements with the help of different tools such as comparative statement, common size statement, ratio analysis, trend analysis, fund flow analysis, cash flow analysis, etc. In this process a meaningful relationship is established between two or more accounting figures for comparision. In this lesson you will learn about analysing the financial statements by using comparative statement, common size statement and trend analysis. Notes OBJECTIVES After studying this lesson, you will be able to : explain the meaning, need and purpose of financial statement analysis; identify the parties interested in analysis of financial statements; explain the various techniques and tools of analysis of financial statements. 27.1 FINANCIAL STATEMENTS ANALYSIS (MEANING, PURPOSE AND PARTIES INTERESTED) We know business is mainly concerned with the financial activities. In order to ascertain the financial status of the business every enterprise prepares certain statements, known as financial statements. Financial statements are mainly prepared...
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...profits, and total assets. You must be able to read between the lines of your financial statements and make the seemingly inconsequential numbers accessible and comprehensible. This massive data overload could seem staggering. Luckily, there are many well-tested ratios out there that make the task a bit less daunting. Comparative ratio analysis helps you identify and quantify your company's strengths and weaknesses, evaluate its financial position, and understand the risks you may be taking. As with any other form of analysis, comparative ratio techniques aren't definitive and their results shouldn't be viewed as gospel. Many off-the-balance-sheet factors can play a role in the success or failure of a company. But, when used in concert with various other business evaluation processes, comparative ratios are invaluable. This discussion contains descriptions and examples of the eight major types of ratios used in financial analysis: Income, Profitability, Liquidity, Working Capital, Bankruptcy, Long-Term Analysis, Coverage, and Leverage. Outline: I. Purposes and Considerations of Ratios and Ratio Analysis II. Types of Ratios III. Income Ratios IV. Profitability Ratios V. Net Operating Profit Ratios VI. Liquidity Ratios VII. Working Capital Ratios VIII. Bankruptcy Ratios IX....
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...profits, and total assets. You must be able to read between the lines of your financial statements and make the seemingly inconsequential numbers accessible and comprehensible. This massive data overload could seem staggering. Luckily, there are many well-tested ratios out there that make the task a bit less daunting. Comparative ratio analysis helps you identify and quantify your company's strengths and weaknesses, evaluate its financial position, and understand the risks you may be taking. As with any other form of analysis, comparative ratio techniques aren't definitive and their results shouldn't be viewed as gospel. Many off-the-balance-sheet factors can play a role in the success or failure of a company. But, when used in concert with various other business evaluation processes, comparative ratios are invaluable. This discussion contains descriptions and examples of the eight major types of ratios used in financial analysis: Income, Profitability, Liquidity, Working Capital, Bankruptcy, Long-Term Analysis, Coverage, and Leverage. Outline: I. Purposes and Considerations of Ratios and Ratio Analysis II. Types of Ratios III. Income Ratios IV. Profitability Ratios V. Net Operating Profit Ratios VI. Liquidity Ratios VII. Working Capital Ratios VIII. Bankruptcy Ratios IX....
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...------------------------------------------------- A Report On Comparative Performance Study of Conventional and Islamic Banking in Bangladesh Course Title: THEORY AND PRACTICES OF BANKING IN BANGLADESH Course Code: FBK 312 Submitted To: Md. Nur Nabi Assistant Professor Department of Finance and Banking Faculty of Business Administration and Management Patuakhali Science and Technology University Dumki, Patuakhali- 8602 Submitted by: Group: C (Level: 3, Semester: I) Session: 2012-2013 Faculty of Business Administration and Management Patuakhali Science and Technology University Dumki, Patuakhali- 8602 Date of Submission: 09th May 2015 ------------------------------------------------- Roll No | Registration No | Name of the Students | Signature | 1203051 | 03596 | Nusrat Jahan Rupa | | 1203053 | 03598 | Nusrat Yesmin | | 1203054 | 03599 | Nisath Salsabil Urmi | | 1203056 | 03601 | Mehedi Hasan | | 1203057 | 03602 | Hasan Shahria Nayeem | | 1203060 | 03605 | Khondokar Tanveer Ahsan | | 1203061 | 03606 | Sume Akter | | 1203062 | 03607 | Rased Amer Sohag | | 1203065 | 03610 | Nusrat Jahan Pinki | | 1203067 | 03612 | Rasel Miah | | ------------------------------------------------- Group Member Details ------------------------------------------------- ------------------------------------------------- ATTENDANCE REPORT 1) Level : 3 2) Semester : I 3) Course Code : FBK-312 4) Course Title : THEORY AND PRACTICES...
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...INTRODUCTION | 7 | 4. | STATEMENT ANALYSIS | 8-9 | 5. | RATIO ANALYSIS * FINANCIAL RATIOS * PROFITABILITY RATIOS * TURNOVER RATIOS | 10-1112-1617-20 | 6. | TABLE OF RATIOS | 21 | 7. | CONCLUSION | 22 | 8. | REFERENCES | 23-24 | 9. | APPENDIX | 25-26 | 10. | WORKING NOTES | 27-30 | 11. | NOTES | 31 | ABSTRACT The title of our project is HCL infosystem ltd. The purpose of this assignment is to compare the financial position of HCL between two years 2010 and 2011 by calculating different ratios from a given balance sheet and make a comparative analysis between these two years by comparing with the ideal ratio. Ratio analysis provides us an overview of the company’s financial position in both short term and long term. The ratio analysis, comparative balance sheet and common size balance sheet are gives an accurate picture of company’s position. As financial ratio analysis is a useful technique to measure, compare, and evaluate the financial condition and performance of a company and by calculating these ratios it can help us to answer if the company is business profitable and if it is able to pay its bills and to find how the business is financed and also the company’s financial performance of 2011 compared to 2010. To summarize in short in this assignment we are going to study and calculate different ratios of HCL INFOSYSTEM LTD’s balance sheet and profit & loss account of 2010 and 2011 and make a comparative analysis of these two years and to conclude its...
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...Term Paper On Beximco Textile Ltd.. Course Name: Submitted to: Mr. Tanvir Hamim Lecturer Department of Banking & Insurance University of Dhaka Submitted by Group 9 Date of submission : 16/06/2015 Prepared by: Group-09 Name | ID | Signature | Aditya Podder | 20-085 | | Afsar Dewan Abid | 20-127 | | Md.Mobinul haque | 20-039 | | Quazi Farhana Mustari | 20-067 | | Md. Belal Hossain | 20-059 | | | | | Letter of Transmittal Date:16th June 2015 Mr. Tanvir Hamim Lecturer Banking and Insurance Department University of Dhaka Subject: Submission of report title for Beximco Textile Ltd. Dear sir, We are assigned to present a report of Beximco Textile Ltd. We have presented its ins and outs with the date of three years. Any query regarding this report is appreciated. Sincerely yours Aditya Podder On behalf of group – 09 Department of Banking and Insurance Acknowledgement First of all, we would like to thanks our almighty 'Allah' who creates as well as maintain each and every thing and then we would like to acknowledge the support of Mr.Tanvir Hamim, lecturer of Banking and Insurance Department, who helped us giving helpful instruction.We are also grateful to A S F Rahman, Director ofBeximco Textile.Ltd for generous interview. They spent their most valuable time helping us to achieve a clear structure, also provide us information about their company. At last the...
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... | Financial Statement Analysis & Valuation of Monno Jute Stafllers | A report on “Financial Statement Analysis & Valuation of Monno Jute Stafllers ” Course Title: FINANCIAL STATEMENT ANALYSIS & VALUATION Course Code: F-401 Submitted To: Dr. Mahmood Osman Imam Professor Department of Finance, University of Dhaka Hussain Ahmed Enamul Huda Lecturer Department of Finance, University of Dhaka Submitted By: Sayma Khair 17-115 BBA 17th batch 4th year 1st semester Department of Finance, University of Dhaka Date of Submission: July22, 2014. Letter of Transmittal July 22, 2014 Mahmood Osman Imam Professor Department of Finance University of Dhaka Subject: Submission of term paper on Financial Statement Analysis & Valuation of Monno Jute Stafllers Dear sir, I am extremely gratified & enthusiastic to present a report on Financial Statement Analysis & Valuation Of Monno Jute Stafllers as per as a part of requirement of our BBA Program of Course “FINANCIAL STATEMENT ANALYSIS & VALUATION”, Course no: F-401 . This report was assigned to us with a view to scrutinizing our skill and flamboyance when it comes to financial statement analysis know-how. Moreover, the purpose of this term paper was to extract our inner ability & enhance our financial statement analysis & valuation related potentials. We acknowledge the contribution...
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...FINANCIAL ANALYSIS OF DELL AND HP Executive Summary 2 This financial analysis report examines two high profile competitors, Dell and Hewlett Packard (HP), within the computer/technology industry in order to evaluate company performance and financial health. Overall company strategies were reviewed and considered along with the financial analysis to come to a conclusion for recommendation of investment. The reports introduction gives an overview to the computer/technology industry and expands on the strategies executed by Dell and HP. The financial analysis covers both companies’ common-size income statements and balance sheets, comparative income statements and balance sheets, and various financial statement ratios such as liquidity, capital structure and solvency, return on investment, operating performance, asset utilization and market measures from year 2006 to year 2010. A pro forma look ahead estimated financial performance is generated for each company and assumptions explored that helped derive the financial data for the pro forma. Conclusions are drawn from the above stated financial analysis as well as areas for improvement and investment recommendations. Dell and HP are both well known companies competing in an ever evolving and expanding industry. The industry is in every segment from personal to educational to professional. HP is a more mature company having been founded in 1939, but Dell made waves throughout not only the computer/technology industry but in...
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...CHAPTER-1 1.1 INTRODUCTION The textile sector played a very important role in many developed /developing countries. In Bangladesh this sector has also contributed as well as still contributing towards the development of the socio-economic condition of the general masses. Textile industry has made substantial progress and has continued to contribute to the national economy, both by reducing imports and increasing exports. The existing scenario of the textiles sector is presented below: • Textile sector contributes around 38% of the industrial value addition and earns about 75% of the total export earni9ngs of the country. • Around 4.5 million workforces are engaged in the textiles sector of which 50% are poor women. • In the 1990’s value addition in the RMG (ready made garments) was 20% which by now stands at around 45%. • Around 25% of the total demand of the woven fabrics for the export oriented RMG is supplied by the local weaving mills & the 40% of the fabrics requirements of the cotton woven RMG exports are met by local mills. • 90% of the domestic fabrics and yarn requirements are met by our primary textiles sector (PTS). [SOURCE: Page: 21, annual report 2005, BTMA]. The primary textile sector (PTS) is meeting the major demand of yarn & fabrics of the local markets. In addition to that a significant part of the demand of fabrics of export oriented RMG units is being met by the PTS. With gradual increase in population and expansion of trade...
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...JWCL165_c14_674-725.qxd 8/16/09 7:46 AM Page 674 14 Financial Statement Analysis Chapter STUDY OBJECTIVES After studying this chapter, you should be able to: 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. 6 Understand the concept of earning power, and how irregular items are presented. 7 Understand the concept of quality of earnings. The Navigator ✓ The Navigator Scan Study Objectives ■ Read Feature Story ■ Read Preview ■ Read text and answer p. 681 ■ p. 694 ■ Work Comprehensive Do it! p. 699 Do it! ■ p. 701 p. 703 ■ ■ Review Summary of Study Objectives ■ Answer Self-Study Questions ■ Complete Assignments ■ ✓ Feature Story IT PAYS TO BE PATIENT In 2008 Forbes magazine listed Warren Buffett as the richest person in the world. His estimated wealth was $62 billion, give or take a few million. How much is $62 billion? If you invested $62 billion in an investment earning just 4%, you could spend $6.8 million per day—every day—forever. How did Mr. Buffett amass this wealth? Through careful investing. You think you might want to follow Buffett’s example and transform your humble nest-egg into a mountain of cash. His techniques have been...
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...FINANCIAL STATEMENTS ANALYSIS Objectives At the end of this chapter you should be able to: 1. Describe the meaning and relevance of financial analysis. 2. Discuss the users of financial statements. 3. Describe sources of financial statements. 4. Describe in detail financial ratios. 5. Define financial forecasting. 6. Discuss the types of comparison used in financial statement analysis 7. Compute financial ratios and use them to evaluate financial strengths and weaknesses. 8. Discuss the limitations of financial statement analysis Financial analysis is the process or critically examining in detail, accounting information given in financial statements and reports. It is a process of evaluating relationship between component parts of financial statements to obtain a better understanding of a firm’s performance. A ratio is simply a mathematical expression of an amount or amounts in terms of another or others. A ratio may be expressed as a percentage, as a fraction, or a stated comparison between two amounts. The computation of a ratio does not add any information not already existing in the amount or amounts under study. A useful ratio may be computed only when a significant relationship exists between two amounts. A ratio of two unrelated amounts is meaningless. It should be re-emphasized that a ratio by itself is useless, unless compared with the same ratio over a period of time and/or a similar ratio for a different company and the industry. Ratios focus attention on relationships...
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...------------------------------------------------- An analysis of capital structure of NEXT Programme of Study: MSC INVESTMENT Module: International Treasury Management Tutor: Students ID Number: Date: 23/3/2016 Programme of Study: MSC INVESTMENT Module: International Treasury Management Tutor: Students ID Number: Date: 23/3/2016 Contents 1. Introduction 3 2. Capital structure 4 2.1. Theories 4 2.2. Types of capital 6 2.3. Sources of capital 7 2.4. Reasons of conducting different capital structure 9 3. Capital Structure of NEXT 11 3.1. Comparative analysis of internal and external financing of NEXT 11 3.2. Comparative analysis of debt capital and equity capital of NEXT 13 3.3. Comparative analysis of current debt and non-current debt of NEXT 15 3.4. Financial performance of NEXT 2013-2015 17 4. Conclusion 19 5. Reference 20 6. Appendixes 22 Appendix I 22 Appendix II 23 Appendix III 25 Appendix IV 27 Appendix V 29 Appendix VI 30 1. Introduction Capital structure of firms is arguably one of its most important choices, as Milken (2009) said “It doesn't matter whether a company is big or small, capital structure matters. It always has and always will”. Most companies pay much attention to their capital structure, NEXT is one of the good representative among those companies. NEXT, founded in 1864, now is the largest apparel corporation in UK, which currently operates more than...
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...Financial Statement Analysis is an analysis which highlights important relationships between items in the financial statements. Financial Statement analysis embraces the methods used in assessing and interpreting the results of past performance and current financial position as they relate to particular factors of interest in investment decisions. It is an important means of assessing past performance and in forecasting and planning future performance. The major objectives of financial statement analysis are to provide decision makers information about a business enterprise for use in decision-making. Users of financial statement information are the decision makers concerned with evaluating the economic situation of the firm and predicting its future course. As we know, financial statement analysis so important for investors and creditors. Investors or creditors are interested in the trend of past sales, cost of good sold, operating expenses, net income, cash flows and return on investment. These trends offer a means for judging management's past performance and are possible indicators of future performance. Besides that, financial statement analysis shows the current position of the firm in terms of the types of assets owned by a business firm and the different liabilities due against the enterprise. Then, financial statement analysis helps in assessing and predicting the earning prospects and growth rates in earning which are used by investors while comparing investment alternatives...
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...|Financial Statement Analysis | |Working Capital | |Working Capital is more a measure of cash flow than a ratio. The result of this calculation must be a positive number. It is calculated | |as shown below: | |Working Capital = Total Current Assets - Total Current Liabilities | |Bankers look at Net Working Capital over time to determine a company's ability to weather financial crises. Loans are often tied to | |minimum working capital requirements. | |Accounting Ratios and its utility | |A relationship between various accounting figures, which are connected with each other, expressed in mathematical terms, is called | |accounting ratios. | |According to Kennedy and Macmillan, "The relationship of one item to another expressed in...
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...A PROJECT REPORT ON “COMPARITIVE FINANCIAL STUDY OF TOP THREE TWO WHEELER COMPANIES” FOR HEROHONDA, BAJAJAUTO, TVSMOTOR. SUBMITTED TO TILAK MAHARASHTRA UNIVERSITY IN PARTIAL FULFILLMENT OF 2 YEARS FULL TIME COURSE MASTER OF BUSINESS ADMINISTRATION (MBA) Submitted By: IRFANHUSEN BHORANIA (Batch 2008-10) Guided By: Prof.R.GANESHAN 1 MAHARASHTRA COSMOPOLITAN EDUCATION SOCIETY’S PAI INTERNATIONAL CENTRE FOR MANAGEMENT EXCELLENCE CAMP PUNE-411001 CERTIFICATE This is certify that BHORANIA IRFANHUSEN student of PAI international centre for management excellence, Maharashtra Cosmopolitan Education society, Pune has completed his field work report on the topic of COMPARATIVE FINANCIAL STUDY OF TOP THREE TWO WHEELER COMPANIES and has submitted the field work report in partial fulfillment of MBA of the college for the academic year 2008-2010. He has worked under our guidance and direction. The said report is based on bonafide information. Project guide name Prof. R Ganesan Designation Director 2 PAI INTERNATIONAL CENTRE FOR MANAGEMENT EXCELLENCE Maharashtra Cosmopolitan Education Society DECLARATION I hereby declare that the project titled “COMPARATIVE FINANCIAL STUDY OF TOP THREE TWO WHEELER COMPANIES” is an original piece of research work carried out by me under the guidance and supervision of Prof.R.GANESHAN. The information has been collected from genuine & authentic sources. The work has been submitted in partial fulfilment of the requirement...
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