Week 7: Evaluating Management
Performance - Discussion
Financial Statement Analysis (graded)
Why do managers analyze financial statements? What are they looking for?
Responses
Responses are listed below in the following order: response, author & the date & time the
response is posted.
Response Author Date/Time
Class Professor Backman 12/5/2012 2:03:01 PM
Lets start by discussing the following:
What is the purpose of financial statement analysis?
There are a variety of stakeholders that have interest in a business. What financial
statement ratios would these stakeholders look at? Why?
What type of decisions are the stakeholder's making from their financial statement
analysis?
How is the income statement used in financial statement analysis?
RE:
12/15/2012 9:05:44 PM
Class Irene Turay
Private or public organizations, charities or government services have stakeholders
to whom they are accountable. A stakeholder could be a customer, supplier,
government agency, family of an employee or another entity interested in helping an
organization reach its objectives. A stakeholder will require financial information to
get an understanding of the performance of the organization. This record shows
the owned assets mounts owed, amounts invested in the organization & profitability
to better manage the operations.
, RE:
12/12/2012 10:23:10 PM
Class Alison Richards
The purpose of a financial analysis is to be able to distinguish the overall
viability of a given business. Financial analysis are in relation to accounting
however much of its attention isn't focused upon being able to manipulate the
numbers of such business. Instead financial analysis allows one to look at the
business in means of a whole where attempts are being made to see just how
the will behave within the future. When using financial analysis research is
thus conduct within that business itself as means of suggested course action
for the possible improving or profitability.
RE:
12/13/2012 6:31:11 PM
Class Irene Turay
A financial statement that measures a company's financial
performance over a specific accounting period. Financial performance is
assessed by giving a summary of how the business incurs its revenues &
expenses through both operating & non-operating activities. It also shows
the net profit or loss incurred over a specific accounting period, typically
over a fiscal quarter or year.
Irene Professor Backman 12/16/2012 4:20:10 AM
If a company is using the income statement & vertical analysis to
evaluate performance. Would the performance criteria be based on
dollars or percentages?
Vertical 12/16/2012 11:12:55
Analysis Casey Agans PM
Professor,
Percentages on the statement of earnings in regards to
vertical analysis.
RE:
12/12/2012 7:10:35 PM
Class Irene Turay
Purpose of Financial Statements
,The purpose of financial statements are to provide pertinent
information on the financial position (Balance Sheet),
profitability (Income Statement) & operating, investing, &
financing activities (Cash Flow Statement) of a company.
Financial statements are used by shareholders, executives,
employees, investors, potential lenders such as banks or
vendors, & any other person or institution that needs to
analyze a company
RE:
12/12/2012 7:18:17 PM
Class Leon Kiyonga
Private or public organizations, charities or government services have stakeholders
to whom they are accountable. A stakeholder could be a customer, supplier,
government agency, family of an employee or another entity interested in helping an
organization reach its objectives. A stakeholder will require financial information to
get an understanding of the performance of the organization. This record shows the
assets owned, amounts owed, amounts invested in the organization & profitability to
better manage the operations.
Leon
Well Professor Backman 12/13/2012 3:05:18 AM
Done
What is a good current ratio number? What is a good debt ratio?
What is a good profit margin for companies? How do you know what
the ratios mean?
RE:
Leon
12/13/2012 3:59:51 PM
Well Leon Kiyonga
Done
A good current ratio is 2.0 or better A good debt ratio should
be 1.0 or less. A net margin range of around 5% is
common, however, somewhere around 10% would be
excellent.
Earnings Per Share (EPS) = Net income remaining for
stockholders ÷ Common shares outstanding (also
considered part of the bottom line). For example, $700
(Net income) ÷ 1,000 (1,000 shares of stock) = $ 0.70
, Price Earning Ratio (PE) = Market price ÷
Earnings per share
Dividend Payout Ratio = Dividends per share ÷
Earnings per share
Dividend Yield Ratio = Dividends per share ÷
Current market price
RE:
12/11/2012 1:43:05 PM
Class Joshua Robinson
The purpose of financial statement analysis is to allow managers &
shareholders to analyse the position of the company in order to make
decisions related to the operations of the company or the positions of the
investors.
Stakeholders will look at a variety of statements including a horizontal &
vertical analysis of the balance sheets, income statements, etc. in order make
the above decisions.
Anaylizing the income statement can help the shareholders determine how
money is being spent. Here is a great example from the text:
Similar to our analyses related to the balance sheet, let’s perform horizontal &
vertical analyses of the income statement. The horizontal analysis is presented
in Illustration 14-3. The most obvious change between 2010 & fiscal 2011 is
the $825,508 increase in net sales. This represents a 42.5 percent increase
over fiscal 2010. Cost of merchandise sold increased by $577,992, & this was
a 42.4 percent increase. The result of these two changes is an increase in
gross profit of 43 percent. Recall from our analysis of the balance sheet that
HGW appeared to be expanding operations (e.g., the cost of buildings
increased by 28 percent). Thus, it appears that HGW is opening new stores,
which, at least in part, accounts for the very substantial increase in sales. It
may also be that the economy improved in 2011, which would increase sales
of the types of products sold by HGW.
RE:
12/12/2012 2:38:00 PM
Class Sharon Garcia
The purpose of the financial statement is for the manager to review the
statements & find out if the company goals have been met, need to change,
Performance - Discussion
Financial Statement Analysis (graded)
Why do managers analyze financial statements? What are they looking for?
Responses
Responses are listed below in the following order: response, author & the date & time the
response is posted.
Response Author Date/Time
Class Professor Backman 12/5/2012 2:03:01 PM
Lets start by discussing the following:
What is the purpose of financial statement analysis?
There are a variety of stakeholders that have interest in a business. What financial
statement ratios would these stakeholders look at? Why?
What type of decisions are the stakeholder's making from their financial statement
analysis?
How is the income statement used in financial statement analysis?
RE:
12/15/2012 9:05:44 PM
Class Irene Turay
Private or public organizations, charities or government services have stakeholders
to whom they are accountable. A stakeholder could be a customer, supplier,
government agency, family of an employee or another entity interested in helping an
organization reach its objectives. A stakeholder will require financial information to
get an understanding of the performance of the organization. This record shows
the owned assets mounts owed, amounts invested in the organization & profitability
to better manage the operations.
, RE:
12/12/2012 10:23:10 PM
Class Alison Richards
The purpose of a financial analysis is to be able to distinguish the overall
viability of a given business. Financial analysis are in relation to accounting
however much of its attention isn't focused upon being able to manipulate the
numbers of such business. Instead financial analysis allows one to look at the
business in means of a whole where attempts are being made to see just how
the will behave within the future. When using financial analysis research is
thus conduct within that business itself as means of suggested course action
for the possible improving or profitability.
RE:
12/13/2012 6:31:11 PM
Class Irene Turay
A financial statement that measures a company's financial
performance over a specific accounting period. Financial performance is
assessed by giving a summary of how the business incurs its revenues &
expenses through both operating & non-operating activities. It also shows
the net profit or loss incurred over a specific accounting period, typically
over a fiscal quarter or year.
Irene Professor Backman 12/16/2012 4:20:10 AM
If a company is using the income statement & vertical analysis to
evaluate performance. Would the performance criteria be based on
dollars or percentages?
Vertical 12/16/2012 11:12:55
Analysis Casey Agans PM
Professor,
Percentages on the statement of earnings in regards to
vertical analysis.
RE:
12/12/2012 7:10:35 PM
Class Irene Turay
Purpose of Financial Statements
,The purpose of financial statements are to provide pertinent
information on the financial position (Balance Sheet),
profitability (Income Statement) & operating, investing, &
financing activities (Cash Flow Statement) of a company.
Financial statements are used by shareholders, executives,
employees, investors, potential lenders such as banks or
vendors, & any other person or institution that needs to
analyze a company
RE:
12/12/2012 7:18:17 PM
Class Leon Kiyonga
Private or public organizations, charities or government services have stakeholders
to whom they are accountable. A stakeholder could be a customer, supplier,
government agency, family of an employee or another entity interested in helping an
organization reach its objectives. A stakeholder will require financial information to
get an understanding of the performance of the organization. This record shows the
assets owned, amounts owed, amounts invested in the organization & profitability to
better manage the operations.
Leon
Well Professor Backman 12/13/2012 3:05:18 AM
Done
What is a good current ratio number? What is a good debt ratio?
What is a good profit margin for companies? How do you know what
the ratios mean?
RE:
Leon
12/13/2012 3:59:51 PM
Well Leon Kiyonga
Done
A good current ratio is 2.0 or better A good debt ratio should
be 1.0 or less. A net margin range of around 5% is
common, however, somewhere around 10% would be
excellent.
Earnings Per Share (EPS) = Net income remaining for
stockholders ÷ Common shares outstanding (also
considered part of the bottom line). For example, $700
(Net income) ÷ 1,000 (1,000 shares of stock) = $ 0.70
, Price Earning Ratio (PE) = Market price ÷
Earnings per share
Dividend Payout Ratio = Dividends per share ÷
Earnings per share
Dividend Yield Ratio = Dividends per share ÷
Current market price
RE:
12/11/2012 1:43:05 PM
Class Joshua Robinson
The purpose of financial statement analysis is to allow managers &
shareholders to analyse the position of the company in order to make
decisions related to the operations of the company or the positions of the
investors.
Stakeholders will look at a variety of statements including a horizontal &
vertical analysis of the balance sheets, income statements, etc. in order make
the above decisions.
Anaylizing the income statement can help the shareholders determine how
money is being spent. Here is a great example from the text:
Similar to our analyses related to the balance sheet, let’s perform horizontal &
vertical analyses of the income statement. The horizontal analysis is presented
in Illustration 14-3. The most obvious change between 2010 & fiscal 2011 is
the $825,508 increase in net sales. This represents a 42.5 percent increase
over fiscal 2010. Cost of merchandise sold increased by $577,992, & this was
a 42.4 percent increase. The result of these two changes is an increase in
gross profit of 43 percent. Recall from our analysis of the balance sheet that
HGW appeared to be expanding operations (e.g., the cost of buildings
increased by 28 percent). Thus, it appears that HGW is opening new stores,
which, at least in part, accounts for the very substantial increase in sales. It
may also be that the economy improved in 2011, which would increase sales
of the types of products sold by HGW.
RE:
12/12/2012 2:38:00 PM
Class Sharon Garcia
The purpose of the financial statement is for the manager to review the
statements & find out if the company goals have been met, need to change,
