Financial Statement Analysis

FINANCIAL STATEMENT ANALYSIS DANNY S. LITT INTRODUC TION The figures from the fiscal narrations by themselves obtain brusque significance by themselves. The relationship on mavin result to another, the amount and the direction of the change can fold up to be informative. M e t hods of F i n a n c i a l A n a l ysis : C om p a r a t i v e a n a l ysis The presentation of relative mo bring inary controversys affords an analyst the opportunity to escort trends and analyze the continue an entity has made over a undertake detail of time. The yearly pecuniary statement presentation in a somatic annual report normally includes particular comparative financial statements for the current and preceding year along with a 5 or 10-year summary of pertinent financial entropy. T r e n d p e r c e n t a ges Sales Accounts Receivable ar.

2012 $650,000 70,000 2011 $600,000 52,000 2010 $550,000 44,000 2009 $500,000 40,000 2011 great hundred% one hundred thirty% 2010 110% 110% 2009 100% 100% This data in trend percent come along form would be: 2012 130% clxxv% Sales Accounts Receivable D o l l a r a n d p e r c e n t a ge a n a l y s i s P e r c e n t age a n a l ysi s consists of trim related amounts to a series of percentages of a given sottish. H o r i zon t a l a n a l ysi s indicates the per capita change in financial statement items over a period of time and is useful in evaluating trends. V e r t i c a l a n a l ysi s (common-size analysis) is the way of each item on a financial statement in a given period to a ba se figure and is helpful in detecting trend! s and in making intercompany comparisons of different sized companies. A sense of balance bed sheet and income statement can be converted into common-size statements by dividing the balance sheet items by total assets and income statement items by net sales. H O R I Z O N T A L A N A L Y SIS St a t e m e n t of F i n a n c i a l Posi t ion D e c e m b e r 31, 2012 a n d 2011 ( D o l l a r s i...If you want to get a full essay, guild it on our website: OrderCustomPaper.com

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