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Accounting and Finance

Accounting and Finance. Ratio analysis. Accounting and Finance. Accounting: providing financial information Statements: Balance sheet Income statement Ratio analysis Cash flow statement Exam : AMAACF1 and AMAACF2 Business Plan project: ABPBSP1. Ratio analysis.

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Accounting and Finance

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  1. Accounting and Finance Ratio analysis

  2. Accounting and Finance Accounting: providingfinancialinformation Statements: Balance sheet Income statement Ratio analysis Cash flow statement Exam: AMAACF1 and AMAACF2 Business Plan project: ABPBSP1

  3. Ratio analysis Always compare!! Financial performance analysis: ratio analysis Liquidity Solvency Profitability Examplesusedforcalculation:

  4. Ratio analysis Liquidity: is a company to payoffit’s short term debts? focus on short term debts

  5. Ratio analysis 58% of ourassets is borrowed 42% comes from the owners Solvency: are we able to payoff all ourdebts?

  6. Ratio analysis average: beginning + end year Profitability: howprofitable are we? A. Return onequity:Howprofitable is ourequity: profit indicator forowners

  7. Ratio analysis average Profitability: howprofitable are we? B. Return onassets: howprofitable are ourinvestments? Profit indicator forbanksbutalsocompetitors

  8. Ratio analysis Remember: ratio analysis is alwaysaboutcomparison! Current Ratio: the higher the better , buttoohigh is notgood DebtRatio: the lower the better, butDebt is veryoftencheaperthanEquity. So best is: borrow as much as banksallowyouto borrow Return onAssets: the higher the better Return onEquity: the higher the better

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