Glory Financial Ratios Interpretation Pdf
And we show how to interpret financial ratio analysis warning you of the pitfalls that occur when its not used properly.
Financial ratios interpretation pdf. Financial Statement Analysis is a method of reviewing a nd analyzing a. These ratios provide an. As indicated in the previous chapter the most commonly used techniques of financial statements analysis are comparative statements common size statements trend analysis accounting ratios and cash flow analysis.
They can serve as screening devices indicate areas of. Companys accounting reports financial statements in order to gauge its. Ratio Analysis enables the business ownermanager to spot trends in a business and to compare its performance and condition with the average performance of similar businesses in the same industry.
Provide a method of standardization 2. Although extremely valuable as analytical tools financial ratios also have limitations. 2 Interpretation Here the results of analysis are used to judge a business performanceThis is done by making comparisons a with other similar businesses usually within the same year eg.
Financial Statement Analysis and Security Valuation Penman S 2013 5th Edition International Edition New York. Be only afraid of standing still Chinese Proverb I. We use Microsoft Corporations 2004 financial statements for illustration purposes throughout this reading.
Was the gross profit to sales percentage last year better or worse. Calculations vary in practice. A few points should be noted.
Understanding Financial Statements - Global Edition by Lyn M. You can obtain the 2004 and any other years statements directly from Microsoft. 71 Analyzing financial statements using ratios covered in Financial Accounting.