商务学Chap_17 Accounting.ppt

* * * * * * * * * * * * * * * Ratio Analysis: An evaluation of the relationships between financial statement variables.Companies can assess their financial characteristics by comparing their financial ratios with those of other firms in their industry.Companies can also assess their financial characteristics over time to determine whether their performance is improving or deteriorating.Ratios are commonly classified according to the following types:Liquidity: A firm’s ability to meet short term obligationsEfficiency: How efficiently a firm manages its assetsFinancial Leverage: The degree to which a firm uses borrowed funds to finance its assetsProfitability: The performance of a firm’s operations during a given period of time * * * * * * * * Reporting Standards and Practices Revenue recognition is the formal recording and reporting of revenues in financial statements Matching is a principle stating that expenses will be matched with revenues to determine net income for an accounting period Full disclosure means that financial statements should not include just numbers * Revenue Recognition and the Matching Principle Analyzing Financial Statements (ratio analysis) * An evaluation of the relationships between financial statement variables is called a ratio analysis. The purpose of a financial ratio analysis is to identify the strengths and weaknesses of the firm. * Ratio Analysis Use Reporting Interpret Evaluate Measure of Liquidity Measure of Efficiency Measure of Financial Leverage Measure of Profitability * * Analyzing Financial Statements Solvency ratios, both short- and long-term, estimate risk. They include: Short-Term Solvency Ratios Liquidity ratio measures a firm’s ability to pay its immediate debts Current Ratio Working Capital * Analyzing Financial Statements Long-Term Solvency Ratios Debt ratio measures a firm’s ability to meet its long-term debts Debt-to-Owners’ Equity Ratio (or Debt-to-Equity Ratio) Leverage * Analyzing Financial Statemen