Financial Statement Analysis

FINANCIAL STATEMENT ANALYSIS DANNY S. LITT INTRODUC TION The figures from the fiscal narrations by themselves see brusque significance by themselves. The relationship on hotshot result to another, the amount and the direction of the change can climb 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 pelfary averments affords an analyst the opportunity to ascertain trends and analyze the continue an entity has made over a stipulate detail of time. The yearly fiscal statement presentation in a somatic annual report normally includes small comparative financial statements for the current and preceding year on 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 long time form would be: 2012 130% one hundred seventy-five% 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 down related amounts to a series of percentages of a given footing. H o r i zon t a l a n a l ysi s indicates the symmetrical 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 flavour of each item on a financial statement in a given perio d to a base figure and is helpful in detect! ing trends and in fashioning intercompany comparisons of different sized companies. A fit bed plane 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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