Financial Management SCDL

Financial management By Prof. Augustin Amaladas M. Com., AICWA., PGDFM., B.Ed. ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],*11.CAPITAL BUDGETING *9.LEVERAGES *8.CAPITAL STRUCTURE *7.SOURCES OF LONG TERM AND MEDIUM TERM *5.CASH FLOW STATEMENTS 5.FUND FLOW STATEMENT *4.RATIOS *10.CAPITAL mARKET *3.FINANCIAL STATEMENTS *2.FORMS OF BUSS.ORG. 1.FINANCIAL FUNCTION *6.CAPITALISATION *13.CASH MANAGEMENT *14.RECEIVABLE MANAGEMENT *15.INVENTORY MANAGEMENT *16.DIVIDEND POLICY *12.WORKING CAPITAL MANAGEMENT e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],L L L L L L Welcome by SCDL to AZtecsoft e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],GROWTH OF ACCOUNTABILITY KNOWLEDGE:FINANCIAL ACCOUNTING Cost accounting, Management Accounting Tax accounting and Management e-mail: aug_bang@yahoo.com www.augustin.co.nr

FLOW OF CASH/SHORT TERM AND LONG TERM ,[object Object],information Accounts payable RAW mATERIAL ADR Bonds(281) Preference Shares Bad debts Accounts receivable Debtors Work in progress information Overheads Labour Equity shares CASH GDR information Information Rights issue Leasing/Hr.Pur Reserves Public deposits e-mail: aug_bang@yahoo.com www.augustin.co.nr

FLOW OF CASH - LONG TERM ,[object Object],ADR Long term loans Preference Shares Equity shares CASH Short term GDR land furniture investments goodwill building Patent rights Know how Copy right e-mail: aug_bang@yahoo.com www.augustin.co.nr

FLOW OF CASH-SHORT TERM ,[object Object],information Accounts payable RAW mATERIAL Bad debts Accounts receivable Debtors Work in progress information Overheads Labour information Information Discounting bills creditors Cash credit Sale of investments Bad debts Bad debts Issue of long term funds Sale of fixed assets Bank overdraft cash cash Commer Cial papers e-mail: aug_bang@yahoo.com www.augustin.co.nr

Working capital finance(361) ,[object Object],Inter corpo Rate deposits Trade credit Bills discounts Outstanding Expenses Cash credit Packing credit overdraft Letter of credit loan Commercial papers pledge Hypothecation lien mortgage 1.Spontaneous 2.Bank guarantee 3.Fund based 4.Security e-mail: aug_bang@yahoo.com www.augustin.co.nr

Users of information and goals ,[object Object],organisation shareholders public Benefactors government banks Debenture holders Loan vendor Preference shareholders creditors debtors customers dividend liquidity Dividend/value in the share market Interest/return of capital Interest/return of capital Timely payment Timely supply Good product Less pollution Good name tax e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],Page-3 e-mail: aug_bang@yahoo.com www.augustin.co.nr

Scope of Financial Management ,[object Object],Capital Budgeting Management of Mergers, reorganisation Financing Financial Analysis Management of Current Assets Method of Raising funds Implementation Determine Financing mix Financial Control Receivables Selection Identification Marketable Securities Cash Financial Forecasting Inventory Management Source identification Profit planning Dividend policy e-mail: aug_bang@yahoo.com www.augustin.co.nr

Role of Finance in a Typical Business Organization-page- 9 ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr Board of Directors President VP: Sales VP: Finance VP: Operations Treasurer Controller Credit Manager Inventory Manager Capital Budgeting Director Cost Accounting Financial Accounting Tax Department

Unit-2 Forms of Business organisation ,[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr My business!! My family?

Partnership ,[object Object],h Should we build this plant? e-mail: aug_bang@yahoo.com www.augustin.co.nr

Mini computer ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr Ulta pulta Company Ltd.???

Nature of Financial Statements-Page-30 ,[object Object],Financial accounting 1. Introduction 2. Basic Accounting 3. Process of accounting 4. BRS 5. Rectification of Errors Final accounts e-mail: aug_bang@yahoo.com www.augustin.co.nr

Unit-3 Financial statements ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Chapter-2: Basics of financial accounting ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

1.concepts& conventions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

a] Business entity concept- ,[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

b] Dual aspect concept ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

c] Going concern concept ,[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

d] Accounting period concept ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

e] Cost concept ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Exercise ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

f] Money measurement concept ,[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

g] Matching Concept ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Conventions ,[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Coservativism ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Materiality ,[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Consistency ,[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

2.system of accounting (26) ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

2.Mercantile ,[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Mercantile love!!!!??? ,[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Life Education ,[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],1.Production Prime Cost 1.Godown 1.canteen 2 Cost of sales 6.sales 5.profit 1.Factory administration 4.Sales and distribution 3.General administration Total cost Bin card Stores ledger Cost calculations/operating activity + + = + + Danger Facility department Factory cost/ works cost e-mail: aug_bang@yahoo.com www.augustin.co.nr

Financial Statements ,[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Review: Major Balance Sheet Items ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

An Example: Dell Abbreviated Balance Sheet-34 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

An Example: Dell Abbreviated Income Statement-page-47 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Financial Statement Analysis ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Life education ,[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],Chapter Learning Objectives ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

What do you learn?? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Annual Report Contents ,[object Object],FOUR BASIC FINANCIAL STATEMENTS e-mail: aug_bang@yahoo.com www.augustin.co.nr

Annual Report Contents ,[object Object],FOUR BASIC FINANCIAL STATEMENTS e-mail: aug_bang@yahoo.com www.augustin.co.nr 1

Annual Report Contents ,[object Object],FOUR BASIC FINANCIAL STATEMENTS FOOTNOTES TO THE FINANCIAL STATEMENTS e-mail: aug_bang@yahoo.com www.augustin.co.nr 1 2

Annual Report Contents ,[object Object],FOUR BASIC FINANCIAL STATEMENTS FOOTNOTES TO THE FINANCIAL STATEMENTS SUMMARY OF ACCOUNTING METHODS e-mail: aug_bang@yahoo.com www.augustin.co.nr 1 2 3

Annual Report Contents ,[object Object],FOUR BASIC FINANCIAL STATEMENTS FOOTNOTES TO THE FINANCIAL STATEMENTS SUMMARY OF ACCOUNTING METHODS MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS e-mail: aug_bang@yahoo.com www.augustin.co.nr 1 2 3 4

Annual Report Contents ,[object Object],FOUR BASIC FINANCIAL STATEMENTS FOOTNOTES TO THE FINANCIAL STATEMENTS SUMMARY OF ACCOUNTING METHODS MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS AUDITOR’S REPORT e-mail: aug_bang@yahoo.com www.augustin.co.nr 1 2 3 4 5

Annual Report Contents ,[object Object],FOUR BASIC FINANCIAL STATEMENTS FOOTNOTES TO THE FINANCIAL STATEMENTS SUMMARY OF ACCOUNTING METHODS MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS AUDITOR’S REPORT COMPARATIVE FINANCIAL DATA FOR A SERIES OF YEARS e-mail: aug_bang@yahoo.com www.augustin.co.nr 1 2 3 4 5 6

Financial Statement Analysis ,[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Financial Statement Analysis ,[object Object],MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS 4 e-mail: aug_bang@yahoo.com www.augustin.co.nr

Financial Statement Analysis-page-51 ,[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Tools to Evaluate Financial Information ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Tools to Evaluate Financial Information ,[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr 1

Tools to Evaluate Financial Information ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr 2 1

Tools to Evaluate Financial Information ,[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr 3 2 1

Perform a horizontal analysis of comparative financial statements ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Horizontal Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Horizontal Analysis ,[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Horizontal Analysis ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Horizontal Analysis ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Horizontal Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Horizontal Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Trend Percentages ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Trend Percentages ,[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Trend Percentages ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Trend Percentages ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Trend Percentages ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Horizontal Analysis and Trend Percentages: A Summary ,[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Vertical Analysis ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Vertical Analysis ,[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr 2

Vertical Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Vertical Analysis ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Vertical Analysis ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Prepare common-size financial statements for benchmarking against the industry average and key competitors ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Common-Size Statements ,[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Common-Size Statements ,[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Benchmarking Against the Industry Average ,[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],Benchmarking Against Key Competitors ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Benchmarking Against Key Competitors ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],Life education e-mail: aug_bang@yahoo.com www.augustin.co.nr

Interpretation of Financial Statements-Ratio Analysis-Unit-4 ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Interpretation of Financial Statement Analysis( Ratio Analysis)-page 55- Unit-4 By Prof. Augustin Amaladas ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],PROCTER & GAMBLE and BRISTOL-MYERS SQUIBB ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],PROCTER & GAMBLE and BRISTOL-MYERS SQUIBB ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Opening Vignette - Bristol-Myers Squibb ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Opening Vignette - Bristol-Myers Squibb ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Opening Vignette - Bristol-Myers Squibb ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],Opening Vignette - Bristol-Myers Squibb ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Opening Vignette - Bristol-Myers Squibb ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Opening Vignette -Bristol-Myers Squibb ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],Opening Vignette - Bristol-Myers Squibb ,[object Object],Although P&G’s sales were higher e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Bristol-Myers’ return on sales was nearly twice that of P&G e-mail: aug_bang@yahoo.com www.augustin.co.nr

Financial Statement Analysis: Lecture Outline ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Financial Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

The Main Idea ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

An Example: Dell Abbreviated Balance Sheet ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Absorption Costing vs. Variable Costing Income Statements ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Absorption Costing Income Statement ,[object Object],Sales XXX Cost of Goods Sold: Beginning inventory XXX Cost of goods manufactured XXX Cost of goods available XXX Ending inventory XXX Cost of goods sold XXX Gross Margin XXX Operating Expenses: Selling XXX Administrative XXX XXX Income before Taxes XXX e-mail: aug_bang@yahoo.com www.augustin.co.nr

ABSORPTION COSTING PRO-FORMA ,[object Object], ££Sales Revenue xxxxx Less Absorption Cost of Sales Opening Stock (Valued @ absorption cost) xxxx Add Production Cost (Valued @ absorption cost) xxxx Total Production Cost xxxx Less Closing Stock (Valued @ absorption cost) (xxx) Absorption Cost of Production xxxx Add Selling, Admin & Distribution Cost xxxx Absorption Cost of Sales (xxxx) Un-Adjusted Profit xxxxx Fixed Production O/H absorbed xxxx Fixed Production O/H incurred (xxxx) (Under)/Over Absorption xxxxx Adjusted Profit xxxxx e-mail: aug_bang@yahoo.com www.augustin.co.nr

Variable Costing Income Statement ,[object Object],Sales XXX Cost of Goods Sold: Beginning inventory XXX Cost of goods manufactured XXX Cost of goods available XXX Ending inventory XXX Variable cost of goods sold XXX Product Contribution Margin XXX Variable Selling Expense XXX Total Contribution Margin XXX Fixed Expenses: Factory XXX Selling XXX Administrative XXX XXX Income before Taxes XXX e-mail: aug_bang@yahoo.com www.augustin.co.nr

Marginal costing cost sheet ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

An Example: Dell Abbreviated Income Statement ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Objectives of Ratio Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Rationale Behind Ratio Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],Benchmarking Against Key Competitors ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Using Ratios to Make Business Decisions ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],Using Ratios to Make Business Decisions ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr 3

Types of Ratios-59 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Using Ratios to Make Business Decisions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Using Ratios to Make Business Decisions ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Measuring the Company’s Ability to Pay Current Liabilities-Page-59 ,[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Measuring the Company’s Ability to Pay Current Liabilities ,[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Measuring the Company’s Ability to Pay Current Liabilities ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Ability to Pay Current Liabilities ,[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Ability to Pay Current Liabilities ,[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Ability to Pay Current Liabilities-page-59 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Ability to Pay Current Liabilities-page-60 ,[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Ability to Pay Current Liabilities ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Measuring the Company’s Ability to Sell Inventory and Collect Receivables ,[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],Measuring the Company’s Ability to Sell Inventory and Collect Receivables-page-63 ,[object Object],1 e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],Measuring the Company’s Ability to Sell Inventory and Collect Receivables ,[object Object],1 2 e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],Measuring the Company’s Ability to Sell Inventory and Collect Receivables ,[object Object],1 2 3 e-mail: aug_bang@yahoo.com www.augustin.co.nr

Inventory Turnover-page-63 ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr 2008

Inventory Turnover ,[object Object],[object Object],[object Object],[object Object],[object Object],Sales $25,265.00 Costs of Goods Sold -$19,891.00 Gross Profit $5,374.00 Cash operating expense -$2,761.00 EBITDA 2,613.00 Depreciation & Amortization -$156.00 Other Income (Net) -$6.00 EBIT $2,451.00 Interest -$0.00 EBT $2,451.00 Income Taxes -$785.00 Special Income/Charges -$194.00 Net Income (EAT) $1,666.00 Average inventory $ 4000 Average debtors $5000 e-mail: aug_bang@yahoo.com www.augustin.co.nr

Inventory Turnover ,[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Accounts Receivable Turnover-page-65 ,[object Object],[object Object],[object Object],$ e-mail: aug_bang@yahoo.com www.augustin.co.nr

Accounts Receivable Turnover ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],Accounts Receivable Turnover ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Days’ Sales in Receivables ,[object Object],[object Object],[object Object],$ e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],Days’ Sales in Receivables ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Measuring the Company’s Ability to Pay Long-Term Debt-67 ,[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Debt Ratio-page-67 ,[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Debt Ratio-page 67 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Debt Ratio ,[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Debt Ratio ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Debt Ratio ,[object Object],[object Object],[object Object],[object Object],LOANS, NOTES, BONDS, ETC. e-mail: aug_bang@yahoo.com www.augustin.co.nr

Debt Ratio ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],Debt Ratio ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Times-Interest-Earned Ratio-page-70 ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Times-Interest-Earned Ratio ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Times-Interest-Earned Ratio ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Sales $25,265.00 Costs of Goods Sold -$19,891.00 Gross Profit $5,374.00 Cash operating expense -$2,761.00 EBITDA 2,613.00 Depreciation & Amortization -$156.00 Other Income (Net) -$6.00 EBIT $2,451.00 Interest -$0.00 EBT $2,451.00 Income Taxes -$785.00 Special Income/Charges -$194.00 Net Income (EAT) $1,666.00 Average inventory $ 4000 Average debtors $5000 e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],Times-Interest-Earned Ratio ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Measuring a Company’s Profitability ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],Measuring a Company’s Profitability ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],Measuring a Company’s Profitability ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],Measuring a Company’s Profitability ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],Measuring a Company’s Profitability ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],Measuring a Company’s Profitability-page-74 ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],Return on Sales ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Return on Sales-Net profit ratio-73 ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Return on Sales ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Sales $25,265.00 Costs of Goods Sold -$19,891.00 Gross Profit $5,374.00 Cash operating expense -$2,761.00 EBITDA 2,613.00 Depreciation & Amortization -$156.00 Other Income (Net) -$6.00 EBIT $2,451.00 Interest -$0.00 EBT $2,451.00 Income Taxes -$785.00 Special Income/Charges -$194.00 Net Income (EAT) $1,666.00 $1,666.00 Average inventory $ 4000 Average debtors $5000 e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],Return on Sales ,[object Object],Net Income e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],Return on Assets-74 ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],Return on Assets ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],Return on Assets ,[object Object],Sales $25,265.00 Costs of Goods Sold -$19,891.00 Gross Profit $5,374.00 Cash operating expense -$2,761.00 EBITDA 2,613.00 Depreciation & Amortization -$156.00 Other Income (Net) -$6.00 EBIT $2,451.00 Interest -$0.00 EBT $2,451.00 Income Taxes -$785.00 Special Income/Charges -$194.00 Net Income (EAT) $1,666.00 Average inventory $ 4000 Average debtors $5000 Average total assets $9000 e-mail: aug_bang@yahoo.com www.augustin.co.nr

Return on Assets ,[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],Return on Assets ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],Return on Equity-75 ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Return on Equity ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Return on Equity ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],Earnings Per Share-77 ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Earnings Per Share ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Earnings Per Share ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Analyzing the Company’s Stock as an Investment ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],Analyzing the Company’s Stock as an Investment ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],Analyzing the Company’s Stock as an Investment ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Price/Earnings Ratio-77 ,[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],Price/Earnings Ratio ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],Price/Earnings Ratio ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],Price/Earnings Ratio ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],Price/Earnings Ratio ,[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],Price/Earnings Ratio ,[object Object],Calculating the P/E ratio Market value of stock Earnings per share e-mail: aug_bang@yahoo.com www.augustin.co.nr

Price/Earnings Ratio ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Price/Earnings Ratio ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

P/E ratio ,[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Dividend Yield ,[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Dividend Yield-78 ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Dividend Yield ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Book Value ,[object Object],[object Object],[object Object],DEBIT CREDIT e-mail: aug_bang@yahoo.com www.augustin.co.nr

Book Value ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Review: Major Income Statement Items ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Life education ,[object Object],Thomas Cooper –Dictionary e-mail: aug_bang@yahoo.com www.augustin.co.nr

Accounting Test Question No IFS 4: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Answer to Accounting Test Question IFS No 4 : ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Accounting Test Question No IFS 2: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Answer to Accounting Test Question IFS No 2 : ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Answer:3 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Some difficulty in ratios ,[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Exercise problems-103 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Exercise-2. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Exercise-3 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Exercise-4 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Prob.13. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Prob.12 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Prob.9 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Chapter Objective 5 Use ratios in decision making ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Limitations of Financial Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Limitations of Financial Analysis ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Limitations of Financial Analysis ,[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Limitations of Financial Analysis ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Limitations of Financial Analysis ,[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

The Complexity of Business Decisions ,[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],Liquidity Ratio Examples: Dell ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Ratio Comparison: Current Ratio ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],Leverage Ratio Examples: Dell ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Ratio Comparison: Debt Ratio ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],Profitability Ratio Examples: Dell ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Profitability Ratio Examples: Dell ,[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Ratio Comparison: ROE ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Ratio Comparison: ROA ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Ratio Comparison: Profit Margin ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

[object Object],[object Object],Activity (Turnover) Ratio Examples: Dell ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Ratio Comparison: Asset Turnover ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

The DuPont System ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

The DuPont System ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

The DuPont System: Dell ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

A Note on Sustainable Growth and Stock Returns ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Example: Predicted Sustainable Growth for Dell ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Summary of Financial Ratios ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Limitations of Ratio Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Ratios and Forecasting ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

How Might Ratios Help Me on the IEM? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Sources of Data ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

Types of Ratios ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.nr

The DuPont System ,[object Object],e-mail: aug_bang@yahoo.com www.augustin.co.

Financial Management SCDL

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Financial Management SCDL