ACCT 504 Week 7 Discussions and Course Project Devry

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ACCT 504 (Accounting and Finance, Managerial Use and Analysis)

 

Week 7

 

Week 7: Financial Analysis: The Big Picture - Discussion

Issues in Income Reporting (Graded)

By now, we all know that an income statement portrays the year-to-date performance of a business. However, the bottom-line figure in the income statement, i.e., net income, is influenced by what is reported in the statement under the categories of revenues and expenses. Therefore, readers of the income statement have to carefully examine the income statement in evaluating the future profitability of a business. 
What is the concept of sustainable income? Can you describe in your own words, without just reproducing the definition from the textbook? Can you give an example of what this number may look like by using the income statement of a real-life company?

 

Week 7: Financial Analysis: The Big Picture

Different Tools for Financial Analysis (Graded)

There are different tools for analyzing the financial statements of a company, such as, horizontal analysis, vertical analysis, ratios for measuring financial health and profitability, etc. However, before we begin using these tools, it is important to know the purpose of each tool. Why do we need different tools for analyzing the financial statements? Don't the numbers in the financial statements speak for themselves?

 Week 7 Course Project

Taking a Closer Look at Microsoft and Oracle 2006-2007 (4 Different Versions)

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Ratio’s

•        Earnings per share PROFITABILITY            

•        Current ratio LIQUIDITY

•        Gross Profit Ratio PROFITABILITY              

•        Profit margin ratio PROFITABILITY

•        Inventory Turnover LIQUIDITY                  

•        Days in Inventory LIQUIDITY

•        Receivable Turnover Ratio LIQUIDITY         

•        Average Collection Period LIQUIDITY

•        Assets Turnover Ratio PROFITABILITY      

•        Return on Assets Ratio PROFITABILITY

•        Debt to Total Assets Ratio SOLVENCY        

•        Times Interest Earned Ratio SOLVENCY

•        Payout ratio PROFITABILITY                    

•        Return on Common Stockholders' Equity

•        PROFITABILITY                                         

•        Free cash flow SOLVENCY

•        Current cash debt coverage ratio SOLVENCY

•        Price/Earnings ratio PROFITABILITY

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