ACCOUNTING
ACCOUNTING
THE AIM:
THE AIM:
After conducting the financial report, the
After conducting the financial report, the
company should know how well and how
company should know how well and how
effective, efficient company’s performance in
effective, efficient company’s performance in
certain period of time. Moreover, the decision
certain period of time. Moreover, the decision
of the stockholders will be more accurate if it
of the stockholders will be more accurate if it
is based on the financial report analysis.
is based on the financial report analysis.
It is done by analyzing the financial report.
It is done by analyzing the financial report.
Some financial ratios are counted as base of
Some financial ratios are counted as base of
FINANCIAL REPORT ANALYSIS
FINANCIAL REPORT ANALYSIS
RATIOS:
RATIOS:
Liquidity/Current RatioLiquidity/Current Ratio
Solvability/Debt Equity RatioSolvability/Debt Equity Ratio Rentability Ratios:Rentability Ratios:
Return On Assets (ROA)Return On Assets (ROA) Return On Equity (ROE)Return On Equity (ROE)
Liquidity/Current Ratio
Liquidity/Current Ratio
Liquidity/current ratio is conducted to know how well Liquidity/current ratio is conducted to know how well
the company can fulfill their short-term debt.
the company can fulfill their short-term debt.
It is calculated by comparing the current assets with It is calculated by comparing the current assets with
the short-term debt multiplied by 100%.
the short-term debt multiplied by 100%.
Current Assets
Current Assets x 100%x 100% Short-term debt
Short-term debt
The
The higherhigher the result, the better company’s performance the result, the better company’s performance will be. The company can guarantee that they will
will be. The company can guarantee that they will
fulfill their short-term debt.
Solvability/Debt Equity Ratio
Solvability/Debt Equity Ratio
Solvability/Debt Equity Ratio is conducted to know Solvability/Debt Equity Ratio is conducted to know
how well the company can fulfill their all their debt,
how well the company can fulfill their all their debt,
even the company is going to bankrupt.
even the company is going to bankrupt.
It is calculated by comparing the total debts with the It is calculated by comparing the total debts with the
total assets multiplied by 100%.
total assets multiplied by 100%.
Total Debts
Total Debts x 100%x 100% Total Assets
Total Assets
The
The smallersmaller the result, the better company’s the result, the better company’s
performance will be. The company can guarantee that
performance will be. The company can guarantee that
they will fulfill all their debt.
Rentability Ratio
Rentability Ratio
Rentability Ratio is conducted to know how well the company’s Rentability Ratio is conducted to know how well the company’s performance to produce the profit sales.
performance to produce the profit sales. Rentability ratio has two kinds of ratio:Rentability ratio has two kinds of ratio:
Return on Assets (ROA). It is calculated by comparing the profit Return on Assets (ROA). It is calculated by comparing the profit sales with the total assets multiplied by 100%.
sales with the total assets multiplied by 100%. Profit Sales
Profit Sales x 100%x 100%
Total Assets Total Assets
Return on Equity (ROE). It is calculated by comparing the profit Return on Equity (ROE). It is calculated by comparing the profit sales with the total equity multiplied by 100%.
sales with the total equity multiplied by 100%. Profit Sales
Profit Sales x 100%x 100%
Total Equity Total Equity
The
