BUSS1030 Lecture Notes - Lecture 9: Accounts Payable, Accounts Receivable, Balance Sheet

• School: University of Sydney
• Department: Business Studies
• Course: BUSS1030
• Professor: All

Document Summary

Buss1030 lecture 9 analysis & interpretation of financial statements. Provide quick & simple means of examining financial health of business. Simply express relationship b/w 1 figure appearing in financial statements & some other, e. g. profit in relation to capital employed. Simple to calculate & a good picture can be built up with just a few, but ratios can be hard to interpret. Can be expressed in various forms, e. g. %, fractions, proportions, depending on the need & use for info. Profitability measure of success in wealth creation. Efficiency effectiveness of utilisation of resources. Liquidity ability to meet short-term obligations. Financial gearing measure of degree of risk to do with amount of leverage used to finance business (borrowing money) Investment measure of returns & performance of shares held by business. Atios (cid:374)eed to (cid:271)e (cid:272)o(cid:373)pared (cid:449)ith so(cid:373)e for(cid:373) of (cid:858)(cid:271)e(cid:374)(cid:272)h(cid:373)ark(cid:859) interpret & evaluate info. E. g. past periods, similar businesses, planned performance.