Archive about 'Interpretation of Financial Statements'
Explain the role of financial statement analysis and name some common economic decision in mind when performing the analysis
Tweet The role of financial statement analysis is to take financial reports prepared by companies, combined with other information to evaluate the past, current and prospective performance and financial position of a company for the purpose of making investment, credit and other economic decisions. Some of the common economic decision in mind when performing the [...]
Tweet Refresh or test your accounting knowledge on Financial Statement Analysis: QUESTIONS: 1.0 Identify the users of financial statement 2.0 Indicate the purpose of financial statement analysis 3.0 Identify the types of financial statement analysis procedures 4.0 Assess the liquidity, profitability, efficiency and solvency of a business by applying the financial statement analysis 5.0 Explain [...]
Tweet An old but very useful strategic profit model or tool analysis is the Du Pont Model. Earlier article describe the basics of this model. Append below in a snaphot, the integration of margin management, asset management and financial management(click the image for a larger picture)
A Comprehensive Illustration Of Business Accounting Ratio/Financial Analysis/Interpretation Of The Financial Statement
Tweet Below is an example to illustrate the major accounting business ratio for the interpretation of the financial statement of a company. A Comprehensive Illustration of Major Ratios Below major ratios have been computed to illustrate what we have learned from earlier articles on ratio analysis/interpretation of financial statement:- Balance Sheet [...]
Tweet Question: For 2008, the company achieved a net margin of 12.5%. (a) What does net margin mean? (b) How useful is this net margin when used for interpreting the company’s financial statement. © Say the company achieved 10.5% net margin in 2007 and 9.5% in 2006 so is it good or bad? Suggested Answer: [...]
Reasons Or Causes for the changes re: increase or decrease in gross profit margin when comparing to previous accounting periods
Tweet 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 [...]
Tweet 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 [...]
What Are The Differences Between Terms Like Gross Profit, Gross Margin, Gross Profit Percentage(%), Gross Profit Margin Or Gross Profit Rate?
Tweet 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 [...]
Tweet 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 of [...]
Tweet 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 is a form of [...]