Accounting Principles Financial Statement Analysis参考.pptx

;Learning Objectives;Analyzing financial statements involves:;Horizontal Analysis;Changes suggest that the company expanded its asset base during 2013 and financed this expansion primarily by retaining income rather than assuming additional long-term debt.;LO 1;The ending retained earnings increased 38.6%. As indicated earlier, the company retained a significant portion of net income to finance additional plant facilities.;Vertical analysis, also called common-size analysis, is a technique that expresses each financial statement item as a percent of a base amount. On an income statement, we might say that selling expenses are 16% of net sales. Vertical analysis is commonly applied to the balance sheet and income statement.;Quality is choosing to finance its growth through retention of earnings rather than through issuing additional debt.;Illustration 18-9 Vertical analysis of Income statements;Enables a comparison of companies of different sizes.;DO IT!;Ratio analysis expresses the relationship among selected items of financial statement data.;The discussion of ratios include the following types of comparisons. Intracompany comparisons for two years for Quality Department Store. Industry average comparisons based on median ratios for department stores. Intercompany comparisons based on Macy’s, Inc. as Quality Department Store’s principal competitor.;Liquidity Ratios;Illustration 18-12;Ratio of 2.96:1 means that for every dollar of current liabilities, Quality has $2.96 of current assets.;;Illustration 18-13;Illustration 18-12;Illustration 18-14;;Illustration 18-15;;Illustration 18-12;Illustration 18-16;A variant of inventory turnover is the days in inventory.;Profitability Ratios;QUALITY DEPARTMENT STORE INC. Condensed Balance Sheets;Illustration 18-17;QUALITY DEPARTMENT STORE INC. Condensed Balance Sheets;Illustration 18-18;QUALITY DEPARTMENT STORE INC. Condensed Balance Sheets;Ratio Analysis;QUALITY DEPARTMENT STORE INC. Condensed Balance Sheets;Ratio Analys