Financial Accounting: An Integrated Statements Approach, 2nd Edition

628 Chapter 13 Statement of Cash Flows The manager of the Retailing Division provided the accompanying memo with this report: Fr ...

Chapter 13 Statement of Cash Flows 629 ANSWERS TO SELF-STUDY QUESTIONS A Cash flows from investing activities include receipts ...

14 Financial Statement Analysis Learning Goals Construct and interpret horizontal and vertical analyses. Calculate and interpret ...

Microsoft Corporationis a well-known, inter- national company. However, U.S. Airways, Kmart, WorldCom, Polaroid, Winn-Dixie Stor ...

HORIZONTAL AND VERTICAL ANALYSES Basic financial statement analysis begins with evaluating the relative size of changes in accou ...

Chapter 14 Financial Statement Analysis 633 We cannot fully evaluate the significance of the various increases and decreases in ...

may be presented in supporting schedules. In such schedules, the percentage analysis may be based on either the total of the sch ...

Chapter 14 Financial Statement Analysis 635 Common-Size Statements Horizontal and vertical analyses with both dollar and percent ...

PROFITABILITY ANALYSIS The relative profitability of a firm can be analyzed by combining both profitability and balance sheet in ...

Chapter 14 Financial Statement Analysis 637 The rate earned on total assets of Pixar was 12.4%, which is good, while DreamWorks ...

Comprehensive Profitability Analysis Exhibit 5 diagrams the comprehensive ratio relationships that can be used to analyze the ra ...

Chapter 14 Financial Statement Analysis 639 Leverage Analysis Margin Analysis Asset Turnover Profit Margin Ratio of Total Assets ...

MARGIN ANALYSIS AND ASSET EFFICIENCY ANALYSIS In the previous section, we noted that Pixaris earning 12.4% on its assets, while ...

Chapter 14 Financial Statement Analysis 641 We now have more insight into the difference between Pixar and DreamWorks’ rate earn ...

asset turnover into its component parts to address this question. The major compo- nents of total assets for many companies are ...

Chapter 14 Financial Statement Analysis 643 The number of days’ sales in receivables is computed for Pixar and DreamWorks as fol ...

The inventory is often a significant asset category for many companies. Thus, inventory efficiency will be an important componen ...

Chapter 14 Financial Statement Analysis 645 A common financial measure of fixed asset efficiency is the fixed asset turnover. As ...

Positive leverage will normally cause the rate earned on stockholders’ equity to ex- ceed the rate earned on total assets. This ...

Chapter 14 Financial Statement Analysis 647 An analysis of a firm’s current position normally includes determining the current r ...