operating results during the past year and discusses new developments that will affect future operations. (2) Second, the report provides these four basic financial statements: i. The balance sheet, which shows what assets the company owns and who has claims on those assets as of a given date. ii. The income statement, which shows the firm’s sales and costs (and thus profits) during some past period. iii. The statement of cash flows, which shows how much cash the firm began the year
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$59,000= $3.69 $3.69 (B) Return on Common Stockholders' Equity 40.80% Return Common Stockholders' Equity Ratio = Net Income - Preferred Stock Dividends Average Common Stockholders' Equity $218,000/ [($465,400+$603,400)]/ 2= $218,000/ $534,400= 40.80% (C) Return on Assets Net Imcome x Net Sales Net Sales Average Total Assets $218,000/ [($1,026,900+ $852,800)]/ 2= 23.2 23.20% Net Income Average Total Assets (D) Current Ratio Current Ratio = Current Assets ÷ Current Liabilities $377,900/
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explaining the ratios used to measure this. Current Ratio The current ratio of a company is the ability the company has to pay off its current liabilities using its current assets. To find this ratio, we take information from the Balance Sheet from year 12 - Total Current Assets and Total Current Liabilities – and divide them: $27,865,000 (Assets) / $15,701,000 (Liabilities) = 1.77 Even though our Current Ratio is below last year’s of 1.86, and below the second quartile ratio of 2.1, it
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. 03 Financial Ratio Analysis ….…………………………………………... 04 Current Ratio ………………………………………….……… 04 Quick Ratio ……………………………………………....…… 05 Inventory Turnover Ratio …………………………………….. 07 Debt Ratio ……………………………………………….……. 08 Net Profit Margin Ratio …………………………………....…. 10 Return on Investment (ROI) ……………………………….…. 11 Return on Equity (ROE) …………………………………….... 12 Price-to-Earnings Ratio (P/E) ………………………………...
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Income-Expense statement- dollar-based P2: Income-Expense statement- percentage-based P4: Balance Sheet- dollar-based P5: Balance Sheet- percentage-based Sources-Uses of Funds P6: Financial Ratios - Cash Flow-Solvency P8: Financial Ratios - Profitability P10: Financial Ratios - Efficiency-Debt-Risk P13: Financial Ratios- Turnover P15: About the Data QII columns throughout refer to the 12-months ending June 30. See P2 notes on Business Receipts for financial industry exceptions. Income and Expense-
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course design. The terminology that follows explains and interprets the concepts and elements relevant to the first week’s objectives and topics in Finance 370. Emphasis is placed on types of securities, markets, finance, equity, liability, ratios, and assets. Finance is the study of how people and businesses evaluate investments and raise capital to fund them. The key role of finance is the management of cash flow in deciding on investments, how to fund them,
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Return on equity Return on equity (ROE) measures the rate of return on the ownership interest (shareholders' equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity. ROE shows how well a company uses investment funds to generate earnings growth. One bank return on equity is quite stable as we see year 2011, 2012 their ROE is 17% and next Two Years Its decrease 2% but ultimately last year its increase 6% which is good for shareholder
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CHAPTER 1 INTRODUCTION INTRODUCTION Money lending in one form or the other has evolved along with the history of the mankind. Even in the ancient times there are references to the moneylenders. Shakespeare also referred to ‘Shylocks’ who made unreasonable demands in case the loans were not repaid in time along with interest. Indian history is also replete with the instances referring to indigenous money lenders, Sahukars and Zamindars involved in the business of money lending by mortgaging the
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Financial Crisis 1. Ratio Analysis The performance and the stability of banks can be quantified and measured through the analysis of their financial ratios. We can have several hundreds of ratios at our disposal. However, we will use only those that are common, and of some meaning for the analysis of the banks. Also, it is important to note that we should use only major and comparable ratios in order to fully understand the financial position of these banks as compared to all those ratios that may include
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products, services, and devices worldwide. Calculating Ratios We calculated the 14 ratios using the Dun & Bradstreet web page and have all the calculation as the end of the paper for reference. We noticed that all the ratios were positive which is great for Microsoft since it seemed common for businesses to show negative ratios from time to time especially for the past coupe years. Comparison of Ratios Comparing a company’s quick ratio to that of its industry is a good way to measure how
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