ACCT 1105
Lesson 5 - Chapter 17
Analysis of Financial Statements
Lesson Competencies
- Explain the purpose and
importance of financial statement analysis
- Identify the users of
accounting information
- Identify and describe
the four areas (building blocks) of analysis
- Liquidity and
efficiency
- Solvency
- Profitability
- Market Prospects
- Identify and describe
the four standards of comparison in financial analysis
- Intracompany
- Competitor
- Industry
- Guidelines
- Define, perform, and
interpret Horizontal Analysis
- Comparative
Statements
- Trend Analysis
- Define, perform, and
interpret Vertical Analysis
- Perform and interpret
Ratio Analysis
- Current Ratio
- Acid-test ratio
- Accounts receivable
turnover
- Inventory turnover
- Days’ sales
uncollected
- Days’ sales in
inventory
- Total asset
turnover
- Debt ratio
- Equity ratio
- Pledged assets to
secured liabilities
- Times interest
earned
- Profit margin ratio
- Return on total
assets
- Return on common
stockholders’ equity
- Book value per
common share
- Basic earnings per
share
- Price-earnings
ratio
- Dividend yield
Assignments
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