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Table of Contents 1. Executive Summary 2 2. Introduction 3 3. Background of the company 4 4. Financial Analysis 5 4.1. Financial Statement Analysis 5 4.1.1. Balance Sheet 5 4.1.2. Income Statement 5 4.1.3. Cash Flow Statement 6 4.1.4. Equity Statement 6 4.2. Ratio Analysis 7 4.2.1. Liquidity Ratio 7 4.2.2. Profitability Ratio 8 4.2.3. Activity Ratio 8 4.2.4. Coverage Ratio 9 4.2.5. Other Ratios 9 5. Future Outlook (2014-2015) 10 6. Reflective report 11 7. Conclusion and Recommendations 12 7.1. Conclusion 12 7.2. Recommendations 12 References 1. Executive summary Analyzing financial statements is an important part of decision making because valuation of profits and losses statements are the most important drivers in business. They are used to diagnose weak spots in the current strategy in an internal perspective and play a key role in making decisions to mitigate against such losses and helps in achieve it long term objective For external stakeholders and decision makers, reviewing the components of financial statements are important in determining the situation at the company. The objective of the report is to analysis the components of the annual financial report of an organization. I have taken M/S Bucher Industries AG’s annual reports from 2009 to 2013 to analyze the organization standing in terms of financials. Detailed analysis of financials including their statement, Ratios, Dividends etc. has been carried out to understand the financial position of the Bucher Industries. The analysis and summary of this report will be useful for ease of decision making in investment/ expansion/ dilution and for the financial planning of upcoming years to the management. 2... ... middle of paper ... ...lysis-putting-the-numbers-to-work. Kasper Meisner Nielson (2010) Corporate Finance I ‘Budgeting, Finance and Valuation’. Bookboon Publication Kasper Meisner Nielson (2013) Corporate Finance II ‘Budgeting, Finance and Valuation’. Bookboon Publication Larry M. Walter, Christopher J. Skousen (2001) ‘Principles of Accounting Processing’, principlesofaccounting.com 2001 Lawrence J. Gitman ‘Principles of Managerial Finance’: Pearson Education. Available at: http://wps.aw.com/aw_gitman_pmf_12/85/21793/5579249.cw/. Michael C. Thomsett (2011) ‘A Practical Guide to Annual Reports’. Jaico Publishing. Pamela Peterson Drake ‘Financial Ratio Analysis’, reading prepared for James Madison university. Available at http://educ.jmu.edu/~drakepp/principles/module2/fin_rat.pdf. Paresh Shah (2012) ‘Financial Accounting for Management’. Published by: Oxford University Press, 2012
Financial statement users around the globe use financial statements to evaluate the performance of companies (Fundamentals of Financial Accounting, 2006). In order to locate a company’s reported assets, liabilities, expenses and revenues, statement users rely on four types of financial statements. The four financial statements include: Balance Sheet, Income Statement, Statement of Retained Earnings, and Statement of Cash Flows (Fundamentals of Financial Accounting, 2006, p. 6). Each of these reports provides different information to the financial statement user. The Balance Sheet reports at a point in time: a company’s assets (what it owns), liabilities (what it owes) and stockholder’s equity (what is left over for the owners) (Fundamentals of Financial Accounting, 2006, p.7). The Income Statement shows whether a business made a profit (net income) during a specific period of time (Fundamentals of Financial Accounting, 2006, p. 10). The Statement of Retained Earnings illustrates what portions of the company’s earnings was paid to stockholders and retained by the company for future operations (Fundamentals of Financial Accounting, 2006, p.12). Finally, the Statement of Cash Flows reports summarizes how a business’ “operating, investing, and financial activities caused its cash balance to change over a particular range of time” (Fundamentals of Financial Accounting, 2006, p.13).
In order to make inferences about a company’s financial condition, its operations, and its attractiveness as an investment we have analyzed financial ratios and compare ratios derived from SVU’s financial statements (see chart 1).
Interpretation of Financial Statements There are three main aids to the analysis of financial statements: HORIZONTAL and TREND ANALYSIS VERTICAL ANALYSIS RATIO ANALYSIS HORIZONTAL and TREND ANALYSIS = == == == ==
The directors need to be able to view the financial performance of the group in order to make relevant and informed decisions. In order to obtain this information the correct procedures, as mentioned, must be followed to ensure that assets are not overstated and liabilities
Any successful business owner or investor is constantly evaluating the performance of the companies they are involved with, comparing historical figures with its industry competitors, and even with successful businesses from other industries. To complete a thorough examination of any company's effectiveness, however, more needs to be looked at than the easily attainable numbers like sales, profits, and total assets. Luckily, there are many well-tested ratios out there that make the task a bit less daunting. Financial ratio analysis helps identify and quantify a company's strengths and weaknesses, evaluate its financial position, and shows potential risks. As with any other form of analysis, financial ratios aren't definitive and their results shouldn't be viewed as the only possibilities. However, when used in conjuncture with various other business evaluation processes, financial ratios are invaluable. By examining Ford Motor Company's financial ratios, along with a few other company factors, this report will give a clear picture of how the company is doing now and should do in the future.
This financial ratio analysis will help to identify Rolls-Royce’s strength and weaknesses during three years period from 2011 until the end of 2013. While it is a helpful tool for investors to make investment decisions base on profitability of the company, managers can make strategic decisions of the company. However, there are some limitations in using financial ratio analysis alone when make decisions. Comparing ratios with the industry norm and with the company’s rivals, the user of the financial ratio analysis will be able to anticipate future prospects. Rolls-Royce’s nearest rivals are General Electric (GE) and Pratt & Whitney, owned by United Technologies Corporation (UTC). These world 's top three companies are investing massively in R&D to satisfy demand of a booming global market for environmentally cleaner, energy efficient power engines that result in a huge number of orders of commercial airliners. All top
Before beginning an analysis of a company it is necessary to have a complete set of financial statements, preferably for the pas few years so that historical trends can be obtained. Ratios are a way for anyone to get an idea of the financial performance of a company by using the information contained in the financial statements. Ratios are grouped into four basic categories, liquidity, activity, profitability, and financial leverage. This document will use a variety of these ratios to analyze the firm, Sample Company, as of December 31,2000.
Evaluating a company’s financial condition can be done by looking at its profitability or its ability to satisfy long-term commitments. These measures can be viewed through an analysis of a company’s financial statements, including the balance sheet and income statement. This paper will look at the status of Scholastic Company’s (Scholastic) ability to satisfy its long-term commitments and at the profitability of Daktronics, Inc. (Daktronics). This paper will include various financial ratio calculations and an analysis of the notable trends. It will also discuss the profitability and long-term borrowing positions of the firms discussed.
The article Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy was written in 1968 by Edward I. Altman. The purpose of the article is to address the quality of ratio analysis as an analytical technique. At the time, some academicians were moving away from ratio analysis and moving toward statistical analysis. The article attempted to determine if ratio analysis should be continued, eliminated and replaced by statistical analysis or serve together with statistical analysis as cofactors in financial analysis. The example case used in the article was the prediction of corporate bankruptcy.
This purpose of this paper was to evaluate the financial statements of IBM Corporation during the past five years to assess the future profitability of the company. Unfortunately, this report only reflects up to four years, as appose to a five year analysis. I used Plaza College Library along with Queens Library to do my research. This helps me with the data base I needed to access and wasn’t able to at home. My professor helped me with my research; he helped me understand the things I didn’t understand. He also guided me to web pages that help me with my research. I used many search engines such as IBM company web page, Google, ProQuest, MSN Money, and Yahoo Finance. IBM web page was the best because most of my information came for the company web pages. Google was helpful because it help me find my company information that wasn’t on the web page. ProQuest is good for data base but it wasn’t helpful to my research. MSN money was very helpful I was able to get my 10k report and many other things. Yahoo Finance, I was able to get all my finance information without a problem. All the information I received, I was able to put in it in my research paper to create a 10 to 12 page research paper. In this paper I have applied knowledge of business concepts, information literacy techniques, and critical thinking.
The Purpose of Financial Statements The financial statements of a business are used to provide information about the status of the business, set performance targets and impose restrictions on the managers of the firm as well as provide an easier method for financial planning. The financial statements consist of the Profit and Loss Account, Balance Sheet and the Cash Flow Statement. There are four areas of information, which we can collect from a company's financial statements. They are: Ÿ Profitability - This information comes from the Profit and Loss account. Were we can compare this year's profit with the previous years.
In this assignment, we will be conducting a business analysis on two major corporations in the same industry. Nestle and Dutch Lady. The analysis will be based on the companies’ performance for both the years 2011 and 2012 and the data will be extracted from the companies’ financial reports.
Owners and managers require financial statements to make important business decisions that affect its continued operations. Financial analysis is then performed on these statements to provide management with a more detailed understanding of the figures. These statements are also used as part of management's annual report to the stockholders.
The major objectives of financial statement analysis are reviewing the company’s performance over past periods, assessing the current financial position, forecasting profitability trends and forecasting financial failure (Fazal, 2011). These objectives in turn satisfy the ultimate objective of providing
Financial analysis is the process of identifying the strength and weakness of the company with the help of company accounting information provided by the Profit and Loss Account and Balance sheet. It is the process of valuation of relationship between components of financial statements to obtain a better understanding of the firm’s financial performance. It is a technique of analyzing the financial position as well as the progress of the firm. Financial analysis will give the management considerable insight into the levels and areas of strength and