BU127 Chapter Notes - Chapter 13: Time Series, Reserve Requirement, Income Statement
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BU127 Full Course Notes
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Bu127 chap 13 - analyzing financial statements. Users of statements: management: uses accounting data to make product pricing and expansion decisions, external decision makers: uses accounting data for investment, credit, tax and public policy decision. Three types of statement info: past performance: income, sales volume, cash flows, roi, eps, present condition: assets, debt, inventory, various ratios, future performance: sales and earnings trends are good indicator of future performance. Statement analysis is based on comparisons: time series analysis: examines a single company to identify trends over time, comparisons with similar companies: provides insights concerning a company"s relative position. Component percentages: express each item on a particular statement as a percentage of a single base amount: net sales on income statement. (everything divide by net sales, total assets on balance sheet. Measures how much income was earned for every dollar invested by owners. Measures profitability with respect to both creditors and shareholders.