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Financial Statement Analysis
ACC561
8-2-2010
Financial Statement Analysis
The analysis of financial ratios is important in tracking a firm’s performance over time. Many ratios are used to indicate different data, how well a firm is utilizing its assets, and how well they meet their short-term and long-term obligations. The measurement conventions express different areas of company activities; all found by examining the financial statements and balance sheets. The ratios found for the three industries used all yield vastly different results and cannot be compared in their economic size in relation to the others.
Barnes & Noble as well as Progress Energy provide their financials quarterly, while Toyota’s income statements and cash flows provided annually. Presentations can be used to calculate the performances within the different industries by using quick and current liquidity ratios to provide information on a firm’s ability to meet its short term financial obligations which highlight differences based on the liquidity of inventory. Other ratios, such as the financial leverage show clarity of a firm and how they meet long-term debt obligations by comparing debt to total equity. In this case, all three industries can be compared side-by-side and provide a successful view that shows which firms are exceeding their current liabilities.
The different measurement ratios were useful in indicating the progress of firms, and their effectiveness in their respective industries.
IASB Measurement Conventions affect Presentations
With any organization or structure the need for standards of operating is important; the FASB (Federal Accounting Standards Board) and the IASC (International Accounting Standards Committee) concluded that in order for accounting to function properly a standard should be enforced ensuring accountants perform and adhere to the legal policies. To achieve this goal a merging of previous standards nationally and...
ACC561
8-2-2010
Financial Statement Analysis
The analysis of financial ratios is important in tracking a firm’s performance over time. Many ratios are used to indicate different data, how well a firm is utilizing its assets, and how well they meet their short-term and long-term obligations. The measurement conventions express different areas of company activities; all found by examining the financial statements and balance sheets. The ratios found for the three industries used all yield vastly different results and cannot be compared in their economic size in relation to the others.
Barnes & Noble as well as Progress Energy provide their financials quarterly, while Toyota’s income statements and cash flows provided annually. Presentations can be used to calculate the performances within the different industries by using quick and current liquidity ratios to provide information on a firm’s ability to meet its short term financial obligations which highlight differences based on the liquidity of inventory. Other ratios, such as the financial leverage show clarity of a firm and how they meet long-term debt obligations by comparing debt to total equity. In this case, all three industries can be compared side-by-side and provide a successful view that shows which firms are exceeding their current liabilities.
The different measurement ratios were useful in indicating the progress of firms, and their effectiveness in their respective industries.
IASB Measurement Conventions affect Presentations
With any organization or structure the need for standards of operating is important; the FASB (Federal Accounting Standards Board) and the IASC (International Accounting Standards Committee) concluded that in order for accounting to function properly a standard should be enforced ensuring accountants perform and adhere to the legal policies. To achieve this goal a merging of previous standards nationally and...