Archive about 'Interpretation of Financial Statements'
Reasons Or Causes for the changes re: increase or decrease in gross profit margin when comparing to previous accounting periods
When I analyse the gross profit margin by comparing to previous accounting period, I found that there is an increase in gross profit margin. Can you tell me what are some of the reasons for the increase in gross margin? What if it shows decrease in gross profit margin, please also give me some major [...]
Basic Understanding Of The DuPont Model/System: What is it and the benefits derived.
Below article looks at a very old & useful analytical tool often used in Ratio Analysis/Interpretation of financial statements namely the DuPont System/Model.
It explains what is this model and the benefits of using this model for ratio analysis.
WHAT IS DUPONT SYSTEM/MODEL
1. The DuPont System was developed by DuPont Corporation to dissect a firm’s financial statement, [...]
What Are The Differences Between Terms Like Gross Profit, Gross Margin, Gross Profit Percentage(%), Gross Profit Margin Or Gross Profit Rate?
Is there a difference when we use terms like gross profit, gross margin, gross profit %. gross profit margin or gross profit rate?
Answer:
It is interesting to note that some of us still use the above terms interchangeably.
However, take note that:
Gross Profit is an ABSOLUTE term which is simply:
[ Gross Profit = [...]
Answer To True Or False Question On Financial Statement Analysis/Ratio Analysis
Answer to True Or False Question On Interpretation Of Financial Statement or Ratio Analysis
True
False
1.
Financial statements that reflect financial data for two or more periods are often referred to as comparative statements
X
2.
Development of data that measure changes occurring from one accounting period to another is a form [...]
True Or False Question On Financial Statement Analysis/Ratio Analysis
Append below true and false questions on Financial Statement Analysis or Interpretation Of Financial statements:
True
False
1.
Financial statements that reflect financial data for two or more periods are often referred to as comparative statements
2.
Development of data that measure changes occurring from one accounting period to another [...]
Listing Of All Topics Under Interpretation Of Financial Statements
Append below a summary of articles on business accounting ratio analysis:
BUSINESS RATIO ANALYSIS
Ratio analysis-Frequently Asked Questions
Table/Summary Of Financial Accounting Ratio Analysis
What Is Capital Employed
Undercapitalization or overtrading and its tell tale/signs/symptoms
Overcapitalization and its tell tales/signs/symptoms
Proprietary Ratio
PROFITABILITY Ratio
Return On Assets
Net Profit Margin or Net Profit % over Sales
Gross Profit Margin or Gross Profit % over Sales
What is [...]
Table: Summary Of Financial Accounting Ratio Analysis
SUMMARY OF FINANCIAL ACCOUNTING RATIO
PROFITABILITY RATIO:
Financial Ratio
Formula
Measurements
Return on Total Assets
Operating profit before income tax + interest expense/ Average total assets
Measures rate of return earned through operating total assets provided by both creditors and owners
Return on ordinary shareholders’ equity
Operating profit & extraordinary items after income tax minus Preference dividends / Average ordinary shareholders’ equity
Measures rate of [...]
Answer To Accounting Question IFS Test No 4 On Interpretation of Financial Statements
Answer to Accounting Test Question IFS No 4:
Current ratio
Acid-test ratio
Debt to equity ratio
1
Company issued ordinary shares for cash
I
I
D
2
Bought raw material on account
I
D
I
3
Received money from accounts receivable
N
N
N
4
Expiration of prepaid rent
D
N
I
5
Payment of cash dividend
D
D
I
6
Purchase long term investment with cash
D
D
N
7
Sale of fixed assets for cash with no gain or loss
I
I
N
8
Stock write off
D
N
I
9
Refinance [...]
Accounting Test Question IFS No 4 : Interpretation Of Financial Statements
Accounting Test Question No IFS 4:
Effect of Management Decisions On Ratios
Require:
Put by letter whether each of the actions listed below will immediately
-increase (I),
-decrease (D) or
-have no effect (N) on the ratios shown.
Current ratio
Acid-test ratio
Debt to equity ratio
1
Company issued ordinary shares for cash
2
Bought raw [...]
Answer To Accounting Question IFS Test No 3 On Interpretation of Financial Statements
Answer to Accounting Test Question IFS No 3:
(a) current ratio
= Current asset/current liabilities
= ($200,000+$810,000+$830,000)/$710,000)
= 2.59
(b) acid-test ratio
= (Current assets- inventory)/current liabilities
=($200,000+$810,000)/$710,000
= 1,42
(c) debt to equity ratio
= (Total liabilities)/Shareholders fund
=($710,000+$550,000)/($1,500,000+$1,670,000)
=0.39
(a) times interest earned ratio
=(Net Income+ Interest Expense+ Income Tax)/Interest Expense
=($210,000+$40,000+$150,000)/$40,000
=10 times
July 2, 2009
- A Basic Understanding of Our Malaysian Tax Audit ( Part 1)
- A Basic Understanding Of Our Malaysian Tax Audits ( Part 2)
- Internal Control: The Importance Of Segregation Of Duties
- Internal Control Checklist/Questionaire/Assessment On Human Resources & Personnel Expenditure
- Internalnternal Control:Control Framework Within An Organisation
- Internal Control Checklist/Questionaires/Assessment On General Accounting
- Internal Control Checklist/Questionaires/Assessment On Project Management
- Internal Control Checklist/Questionaires/Assessment On Revenue Cycle


