HELP: how to analyse a fin. report (1 Viewer)

[theone123]

hmm... my assignment is dued very soon for accting. I havent analyse a fin. rpt b4.

Does anyone know how to analyse a financial report? how do you tell if the company is performing well in the long or short run? recommendations to improve a financial report? esp. a big company one? lolz, impression of usefulness to as seleciton, presentation of teh report? view about the fin. position and perfomance of firm?

what is a summary of ratio calculations? is that ROA and ROE? etc. how do i do this from a statement?

omg, im so stuffed. advice is greatly appreciated.

 

[theone123]

acc. rpt and dec

 

[Everlaster]

acc. rpt and dec

christ, ive forgotten all my financial reporting analysis..
isnt that all in your textbook? ROE, ROA, debt/equity ratio, liquidity ratio - they're all important. Figure out what they mean and what kind of figures indicates a "stable" entity

 

[SoCal]

Basically you have to calculate all the ratios and then perform both vertical and horizontal analysis, and ideally compare this with a similar company in the same industry. I have a similar assignment at the moment.

 

[SoCal]

All we had to do was take the results from the fin report and then perform an audit by checking to see if these results were correct but using the ratios..

That won't tell you how well the company is performing over the long term though, which is what his/her assessment is asking.

 

[Minai]

That won't tell you how well the company is performing over the long term though, which is what his/her assessment is asking.

certain ratios do in fact give you an indication of how well a company will be performing in the longer term.

remember that short-term in accounting means within one operating cycle (usually within 12 months)

 

[SoCal]

certain ratios do in fact give you an indication of how well a company will be performing in the longer term.

remember that short-term in accounting means within one operating cycle (usually within 12 months)

True, but I was referring to how well a company has performed over the long term, not how well they will be performing over the long term, and I don't think any ratios that I have done do that.

 

[Minai]

True, but I was referring to how well a company has performed over the long term, not how well they will be performing over the long term, and I don't think any ratios that I have done do that.

well, thats easy! just look at their previous years' financial statements to see how they've performed

 

[SoCal]

well, thats easy! just look at their previous years' financial statements to see how they've performed

It is not always that easy though. Isn't that why ratios here developed?

 

[Cyph]

certain ratios do in fact give you an indication of how well a company will be performing in the longer term.

hmm, I don't know.

Past ratios aren't a guarentee of future performance... take One.tel for example, they must have smudged the fuck out of their financial reports to stay in operation like they did.

I think all they can do is give you an idea of how a company is likely to perform in future. One of the company's I'm doing atm had a liqudity ratio of 1.5 one year, then 2.2 the next year. However, the inventory turnover when it was less liquid was much higher, so there was less cash tied up in inventory. Conversly, when they were more liquid, the inventory turnover was lower, so more cash tied up in inventory.

 

[Minai]

Yes thats the problem...you can only use ratios to give indications on how the company might perform if their financial statements are in fact true and fair..if they fudge their reports and don't get caught by the auditors, there's nothing you can do

 

[Cyph]

'cept get fucked in the ass if you use it to help make an investment decision

 

[t-i-m-m-y]

ACCT1B: analyse enron's reports. twas a tedious but rewarding task.. maybe i'll post up what i wrote i liked it

 

[SoCal]

ACCT1B: analyse enron's reports. twas a tedious but rewarding task.. maybe i'll post up what i wrote i liked it

I bet you your report wasn't 64 pages!

 

[t-i-m-m-y]

well they are very strict: 4 a4 pages with 2.5cm margin each side, double spaced, justified alignment

i still wrote 2000ish words then trimmed down

 

[Constip8edSkunk]

lol mine was 11.5 font, 1.8 spaced with 2.4 cm margins

 

[SoCal]

Haha, go the wroughting!