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Financial Statement Analysis

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For just £5 you will receive a comprehensive introduction to the Profit and Loss Account and Balance Sheet. Here's the introduction from the chapter to whet your appetite:

Financial Statement Analysis can be applied to any set of accounts for any business, whether it’s a tiny sole trader or a massive plc; but let’s begin with a controversial statement: there’s more rubbish written about financial statement analysis than any other aspect of accounting and finance! Textbooks are riddled with examples that include such statements as “The ideal current ratio is 2:1.” and then they present calculations based on one or two years’ worth of data only and pretend to be able to draw meaningful conclusions from them. We will get rid of such nonsense!

In this chapter we will

• work through a set of company data line by line
• analyse our results on the basis of the evidence provided
• point out where more data or information should be considered
• show you how you can carry out your own analyses

By the end of this chapter you will have come to appreciate that financial statement analysis, or ratio analysis, centres around financial analysis under these headings:

• liquidity
• profitability
• rate of return
• asset usage
• gearing
• investors

In the chapterWorking Capital Management we’ll provide a similar review of that topic by analysing ratios, other key indictors, industry benchmarks and so on.

What we’ll do is to take each of these headings and explore both the ratios included under it and offer some interpretation of what we find. We’ll do all of this by working with specific data from Marks & Spencer: you should immediately try to copy the work and the analysis for your own company or any other company you choose.

There is a two part worksheet at the end of this chapter that you can photocopy and use to work through any sets of accounts you might want to analyse:

• part one can be used for vertical and trend analysis
• part two can be used for horizontal analysis

email support: all fully paid up subscribers will be free to ask follow up questions by email to seek clarification and further guidance as they wish: we promise a turnaround of within 24 hours of all questions.

Format: our work comes in Adobe Acrobat format..

Place your order: to order, just go to the Financial Accounting Department's OnLine Shop now and to confirm whether you want the email and/or the Paper based or CD-ROM based version.