MGAB02H3 Lecture : Chapter 13 Notes.docx

• School: UTSC
• Department: Financial Accounting
• Course: MGAB02H3
• Professor: G.Quan Fun

Document Summary

Diff. users have diff. needs diff. needs require diff. ratio analysis assess the risks associated with the return. Concerns of creditors: short and long term liquidity. Time series analysis trend analysis information for a single company is compared over time on a year over year basis. Md+a (management discussion + analysis) min. 10 years comparison e. g. change in sales volume each year for its existing stores. Provides insights concerning a company"s relative performance by comparisons with similar companies within the same industries. Gov. has sic (standard industry clarifications) info that provides useful metrics for comparison purposes. Ratio (percentages) analysis analytical tool designed to identify significant relationships; it measures the proportional relationship b/w 2 f/s amounts. Uses % to allow users to compare results from diff. sizes of companies within the same industry revenue is the base line at 100% (on income statement) total assets is base line at 100% (on balance sheet)