Summary
Chapter 12: Analysis and Interpretation of Financial Statements Summary
- Course
- Rsm219
- Institution
- University Of Toronto (U Of T )
Chapter 12: Analysis and Interpretation of Financial Statements Summary
[Show more]
Seller
Follow
Content preview
Chapter 12 :Analysis and Interpretation of financial ftateme
Finance in decision making
customer Decision :
Customers want to
buy from companies that:
continue service the future
→
goods and
production in
→
customer
provide service
of
Financial
's
statement shows
profitability and
efficiency
company operations
↳
Customers likelihood
and service
can
now
see
and in the
supplier
future .
delivering good
Supplies Decision :
Supplier want to know :
for
can
they pay purchased goods
→
.
.
for products future
they in
→
can continue and
purchase pay .
Employment Decision :
→
provide a competitive salary and benefit
to have increased
→
prepare employee responsibility
?
→
employee has job security
-
Union uses financial statement to seek for better wage and
benefits .
•
Union
may
also
accept lower wage and benefit to help employer
stay in
operations -
,Credit Decision
Person needs to if borrower loan interest
giving know can
repay
+
-
,
.
→ Loan + interest
repaid
with current alerts .
(cash ,
sales , redoubles]
Short -
term lenders thus care about current meets + current liabilities .
Working Capital Current Assets
= -
Current liabilities
Long term loan interest
paid from profits over time
-
-
.
interested in the firms
They
↳ :
are
•
future profits
amount of claims
-
our
profits
(dividends ,
payments ,
investments)
statement of Financial Position borrower's current
liquidity
:
Profitability data (statement of Earnings) :
Forecast future
profitability
Cash flow :
forecasting the amount and
dining of future claims d
profits .
, Investment Decision
that return frame
Investors
buy
shares
expect to earn :
-
→ Dividends
Increase in value of the shares [ capital )
gain
→
& Shane depend the future
profitability
-
Dividends value on
of the
company
↳
Larger Profits =
more resources to dividends &
invest in business repay
factors
Taking industry
under account economic and
•
future
is
important when
predicting profits .
Quantitative = ratios shows concerns for brained & how to
analysis
improve
Qualitative business
strategy
-
=
analysis .
Risks
-
Internet + External factor
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller KM52. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for CA$15.08. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
73918 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now