As a financial manager of the company, this report analyzed the income statement and the balance sheet. This paper contains a purpose of four types of different financial statement and is composed of appropriate utilization.
FINANCIAL STATEMENT 2
Balance Sheet 2
Account Form 3
Report Form 4
Income Statement 5
Statement of Cash Flow 6
Statement of Owner’s Equity 6
ANALYSIS OF FINANCIAL STATEMENT 7
Financial Ratios 7
Horizontal Analysis 7
Vertical Analysis 10
Significance of Liquidity Ratios 13
Current Ratio 13
Acid Test Ratio 14
Significance of Profitability Ratios 14
Gross Margin Ratio 14
Net Profit Margin Ratio 15
Significance of Debt Ratios 15
Debt-to-Net Worth Ratio 15
Long-Term Debt to Total Capitalization Ratio 16
Significance of Coverage Ratios 16
Cash Flow Coverage Ratio 17
As a financial manager of the company, I am going to analyze the income statement and the balance sheet. This paper contains a purpose of four types of different financial statement and is composed of appropriate utilization.
The general objective of this paper is to formulate excellent master budget through given financial statement. This term paper also reviews and analyzes the appropriate ratios and gives the comparison, both of years internally, and externally.
Moreover, this paper also shows the characteristics of balance sheet, and to describe different types of business organization.
Contents of this paper also include the liquidity ratios, importance of profitability ratios, debt ratios, and coverage ratios. It also provides a brief summary of recommendation.
The financial statements assess the firm`s worth and its ability to meet its financial obligations and results of operation. Finance statements prepared regularly are balance sheet, income statement, statement of owner’s equity, and statement of cash flow. (Thefreedictionary.com, 2008)