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Objectives of comparative financial statement analysis?
Comparative financial statements provide analysts with significant information about trends and relationships over two or more years.Liquidity ratios. Measure the ability of the enterprise to pay its debts as they mature.Activity (or turnover) ratios. Measure how effectively the enterprise is using its assets.Profitability ratios. Measure management's success in generating returns for those who provide capital to the enterprise.Coverage ratios. Measure the protection for long-term creditors and investors.
What is Top Down Fundamental Analysis?
Top down: you look at the market as a whole (principal economic factors and data) them you narrow down until your industry etc. etc.Fundamental: you look at the principal ratios of a company compared to the industry. You look at the level of debt, profitability etc. etc. Basically you look at how the company performs in terms of financial performance. Fundamental analysis is the opposite of technical analysis which is just looking at trends and mathematical expression to forecast what is going to happen with a stock.Top down fundamental analysis is just the 2 combined.hope this will help !Cheers,
What are the basic premises of Technical Analysis?
For cycle trends.
What is Sageworks Analyst?
Sageworks Analyst is web-based financial analysis software used by accountants and bankers. The program was created by Sageworks, Inc. of Raleigh, NC. # For Accountants - www.profitcents.com: Sageworks Analyst is an excellent analytical program for deeper financial analysis. The program allows automatic forecasts based on historical trends using regression analysis. # For Bankers - www.sageworksanalyst.com: Sageworks Analyst is used by bankers and financial and credit analysts throughout the United States and Canada. The program was developed to help financial professionals make good credit decisions. Broadly, it includes forecasting and projection models, loan analysis capability, sensitivity analysis, valuation models, private company industry data and benchmarking, and narrative financial analysis reports.
What are five components for industry structure analysis?
Trends, Customer Profile, Technology, Competitors
How ratios in ratio analysis are computed and used?
Ratio analysis is used to evaluate relationships among financial statements items; these ratios are used to identify trends overtime for one company or to compare two or more companies at a point in time. It focuses on three aspects of business: liquidity, profitability and solvency.
Explain the reasons for using ratios as a means of explaining accounting information?
Ratios are used in accounting to provide a comparative analysis of financial data. They allow for easy interpretation and comparison of numbers across different time periods or between companies. Ratios also help identify trends, assess financial health, and identify areas of strength or weakness within a company. Overall, ratios provide a simplified way of conveying complex financial information.
Objectives of comparative financial statement analysis?
Comparative financial statements provide analysts with significant information about trends and relationships over two or more years.Liquidity ratios. Measure the ability of the enterprise to pay its debts as they mature.Activity (or turnover) ratios. Measure how effectively the enterprise is using its assets.Profitability ratios. Measure management's success in generating returns for those who provide capital to the enterprise.Coverage ratios. Measure the protection for long-term creditors and investors.
What are the potential problems and limitations of financial ratio analysis?
'''''Limitations of financial ratio analysis''''' # Many ratios are calculated on the basis of the balance-sheet figures. These figures are as on the balance-sheet date only and may not be indicative of the year-round position. # Comparing the ratios with past trends and with competitors may not give a correct picture as the figures may not be easily comparable due to the difference in accounting policies, accounting period etc. # It gives current and past trends, but not future trends. # Impact of inflation is not properly reflected, as many figures are taken at historical numbers, several years old. # There are differences in approach among financial analysts on how to treat certain items, how to interpret ratios etc. # The ratios are only as good or bad as the underlying information used to calculate them. Although ratio analysis is very important tool to judge the company's performance , following are the limitations of it. 1. Ratios are tools of quantitativeanalysis, which ignore qualitative points of view. 2. Ratios are generally distorted by inflation. 3. Ratios give false result, if they are calculated from incorrect accounting data. 4. Ratios are calculated on the basis of past data. Therefore, they do not provide complete information for future forecasting. 5. Ratios may be misleading, if they are based on false or window-dressed accounting information
Why ratio analysis is important?
Ratio analysis does two things, immediately. The first thing is it allows the company to compare itself with other like companies. If management feels things aren't going well, they can help pinpoint the problem through comparing their ratios with other companies. They may have several ratios that are comparable, but a couple which are way off. That might be where the problem is. Also, ratio analysis may help by comparing your company with prior periods. If a particular ratio is declining when it would be better if it were staying the same or increasing, then again looking at the ratios are important to find out where the problem lies. Ratios are important to spot trends easily mohit rastogi iipm new delhi
Can you give me a sentence for the word analysis?
The analysis of the data revealed important trends and patterns.
Why ratio analysis is?
Ratio analysis does two things, immediately. The first thing is it allows the company to compare itself with other like companies. If management feels things aren't going well, they can help pinpoint the problem through comparing their ratios with other companies. They may have several ratios that are comparable, but a couple which are way off. That might be where the problem is. Also, ratio analysis may help by comparing your company with prior periods. If a particular ratio is declining when it would be better if it were staying the same or increasing, then again looking at the ratios are important to find out where the problem lies. Ratios are important to spot trends easily mohit rastogi iipm New Delhi
What are possible limitations of ratio analysis?
Limitations of financial ratio analysisMany ratios are calculated on the basis of the balance-sheet figures. These figures are as on the balance-sheet date only and may not be indicative of the year-round position.Comparing the ratios with past trends and with competitors may not give a correct picture as the figures may not be easily comparable due to the difference in accounting policies, accounting period etc.It gives current and past trends, but not future trends.Impact of inflation is not properly reflected, as many figures are taken at historical numbers, several years old.There are differences in approach among financial analysts on how to treat certain items, how to interpret ratios etc.The ratios are only as good or bad as the underlying information used to calculate them.
what is financial statement analysis and interpretataion?
It is the process of understanding a companys finacial health,profitability and financial position.this includes 1.understanding the company's financial statement and related footnotes analyzing trends in a financial statements over time comparing with competitors' benchmarks identifying the risk and opportunities based on financial analysis
What can financial analysis be used for?
Financial analysis is a term that can cover more than one realm, although at each approach the end goal is the same. Performing financial analysis on a company or individual, for example, is a close scrutiny of how the entity is doing financially and what concerns or trends should be noted. Similarly, financial analysis tools used in conjunction with investing help to establish and monitor the "health" and longevity of an investment portfolio.
How is technical analysis of stock trends performed?
The principles of technical analysis come from hundreds of years of financial markets data. Analysts examine earnings, dividends, new products, and research to determine what the stock will do.
Describe the Ten commandments of financial analysis?
Thou shalt always gather and analyze accurate and reliable financial data. Thou shalt scrutinize and interpret financial statements and ratios to understand the financial health of a company or investment. Thou shalt consider both quantitative and qualitative factors when evaluating financial information. Thou shalt conduct proper due diligence to ensure the integrity of the information examined. Thou shalt regularly update and review financial analysis to stay informed about changes and trends. Thou shalt consider the industry and market conditions while making financial assessments. Thou shalt adopt a systematic and consistent approach to financial analysis. Thou shalt consider risk and return trade-offs when making financial decisions. Thou shalt exercise objectivity and avoid bias while conducting financial analysis. Thou shalt use financial analysis as a tool to make informed and rational decisions, rather than relying solely on intuition or emotions.
