FIN 305 Midterm: FIN 305 Week 5 Notes

• School: Ryerson University
• Department: Finance
• Course: FIN 305
• Professor: Brad Mac Master

Document Summary

30,000: learn how analyzing and interpreting the income statement can help key stakeholders evaluate profitability and growth, vertical analysis: help understand profitability, horizontal analysis: assesses growth. May increase additional expenses eg. cogs, more advertising, larger sales force, etc. Increase profits at every level: operating leverage scaling. While increasing the scale can generate more profits, it"s unlikely to help us become more profitable at the first profit point. Scaling up will increase revenues and cogs if everything else stays the same. 100%, so all other numbers for comparison have this common size in sales aka number of cents out of every dollar of sales. Sales growth profit growth (scaling: monitor and control large expenses, operating leverage greater profit growth, cost management, miscellaneous expenses not much can be done to control these; try to avoid incurring new ones. Income statement analysis tool for finding ways to improve growth and profitability.