A Financial Statement Analysis Project for Introductory Financial Accounting

In accounting there is much to be learned, about the financial aspects of a business. In the past five weeks I have learned the importance of financial reports and how they relate to the success of an establishment. These reports may include balance sheets and income statements, which help accountants and the public grasp the overall financial condition of a company. The information in these reports is really significant to, managers, owners, employees, and investors. Managers of a business can take and deduce financial

The analysis of financial statements is based on the use of ratios or relative values. Financial statements are used to evaluate the condition of a firm and its financial performance. The measurement and evaluation of information presented in the financial statement is known as analysis and interpretation of financial statement, of which is the relationship between financial statements and decision making process.

Statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP), which refers to a set of rules, standards, and practices. They are used throughout the accounting industry to prepare and standardize financial statements that are issued and help investors and creditors compare companies within the same industry. Companies are expected to follow generally accepted accounting principles when they report their financial information. GAAP affects the measurement of economic activities and the disclosure of information about activities. It also affects the preparation and summarization of economic information, and the record keeping of measurements at average intervals.

This course focuses on ways in which financial statements reflect business operations and emphasizes use of financial statements in the decision-making process. The course encompasses all business forms and various sectors such as merchandising, manufacturing and service. Students make extensive use of spreadsheet applications to analyze accounting records and financial statements. Prerequisites: COMP100 and MATH114 / 4-4

1. How does PPLS create value for its customers? What are the critical risks that it has to manage well?

The course is designed to allow individuals who do not prepare accounting and financial documents to understand and use these documents as tools in effective managerial decision-making, control and planning. Topics include purposes of financial statements, analysis of financial statements using basic accounting concepts, budgeting, and financial accountability in an organization

It is easy to forget that pouring money into a problem will not fix it unless revenue flows continue or are increased and expenses are controlled. Some of the easiest computations can be made with information retrieved from balance sheets and income statements provided by accountants. Ratios such as the current ratio, long-term solvency ratio, contribution ratio, programs and expense ratio, general and management expense ratio, fund-raising and expense ratio, and revenue and expense ratio can provide a picture of where a company stands now compared to where it was in past years and what may need to be done in the future.

There are several case studies and report in the accounting and finance courses. In the finance class, I was taught the recent issues in world economic environment, while in the accounting class, I was taught to record the transaction and analyze the company’s financial statement through balance sheet, income statement, etc.

External users (shareholders, lenders, directors, customers, suppliers, regulators, lawyers, brokers, and the press) rely on financial statement analysis to make decisions in pursuing their own goals.

• Introduce and exercise tools and concepts of financial-statement analysis (including financial ratios, break-even analysis, and cash-flow statements).

These assets are both cash and other things that could be changed into cash, and they might be used if necessary to pay their costs of operating. A non-profit organization uses the long-term solvency ratio to find out if they are likely to be able to pay their bills. This ratio will tell the non-profit exactly how much they depend on contributions from other sources outside of their organization. The organization uses the management/expense ratio to tell them how much they should set aside for administrative costs, besides their program costs. If they save too much money in this category, they can spend less money on their programs. The revenue/expense ratio tells them how much funding they have used to support their fund-raising. The revenue/expense ratio is like the management/expense ratio because if too much money goes into revenue/expense, not enough will go to their programs.

have explained that the Financial statements provide asummarized view of the financial position and operations of a firm. Therefore, much can belearnt about a firm from a careful examination of its financial statements as invaluabledocuments / performance reports. The analysis of financial statements is, thus, an important aidto financial analysis.

3. Assume that cost of goods sold for a company consists only of variable costs and gross margin is = (revenue – cost of goods sold)/revenue. Which of the following is true

Management is a user of financial analysis. Which of the following comments does not represent a fair statement as to the management perspective?

There are about three stakeholders for the system given in the coursework specification identified by the writer; below is the list of them all, together with their functional requirements. The writer has also identified about four non-functional requirements.