MSOM 300 Lecture Notes - Lecture 8: Quick Ratio, Inventory Turnover, Asset

• School: George Mason University
• Department: Business, Minor in
• Course: MSOM 300
• Professor: Reza Rafi

Document Summary

Analyze inancial statement: horizontal analysis, verical analysis, raios. Horizontal analysis: diference between this year and last. Verical analysis: each individual component is expressed as a percentage: compares between up and down the column itself of each year. In income statements all items are expressed as percentage of sales. Balance sheet all items are expressed as percentage of total assets. Raios: studying various relaions ions between items reported in a set of inancial statements. Liquidity raio: company"s ability to pay short term debts, focus on current assets and liabiliies. Solvency raio: debt to asset raio = total liabiliies/ total assets, debt to equity raio = total liabiliies / total stockholder"s equity. = net earning abailablef or common stock/ average number of outstanding common shares (this is in the parentheses (net income preferred dividend)/ average outstanding common share. Book value per share= (stockholder"s equity preferred dividends)/ outstanding common shares. Price earnings raio =market price per share/ earning per share.