Audit Case
Overview of Current Situation'
ABC is generally in good health. The income statement shows that the company saw an increase in revenue for 2009, and this translated to an increase in net income. The company's expenses as a percentage of revenue were 13.6%, down from 15.1% the year before. COGS was 69.6% of revenue, versus 78.2% the year before. The company maintained a similar level of works-in-progress inventory over the course of the year, such that the improved operating performance did not derive from a decrease in inventory. Manufacturing overhead as a percentage of sales also declined. In essence, the improved profit performance comes from incremental improvements in cost control that had the cumulative effect of reducing the overall expenses as a percentage of revenue.
The balance sheet shows that the company's overall value has increased. The key increase here is an investment in new equipment. The value of factory equipment has increased by $42,800, and the liabilities increased in the form of a bank note of $45,000. The purchase of assets was the major use of cash, in particular factory equipment, and the issuance of the debt was the major financing activity.
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Financial statement analysis is a tool by which one can examine the publicly-available financial statements to determine the financial condition of a company. The role of the financial statements is to provide information for both internal and external stakeholders, including shareholders and regulators, about a company's finances. Thus, the SEC demands that financial statements are produced in a specific format so that there is easy comparison between companies and across
Financial Statement Analysis: Adventure Sports Ref: Financial Statement Analysis - Adventure Sports Having listened to your predictions regarding Adventure Sports' chances of success, I decided to analyze the company's financial statements so as to determine who amongst you was right. Looking at the company's income statements, it is clear that its profitability has been improving over time. While Adventure Sports had a net income of $1,000 in 2007, the same improved to $7,000
This means that Ferrellgas is in risk of default. The company paid more in dividends last year than it earned in cash from operations. In short, Ferrellgas has an unsustainable burn rate. While Inergy had a poor financial position, it was able to tap into capital markets to alleviate any cash crunch -- Ferrellgas has yet to do this and of all these firms is the closest to default. Amerigas
Wal-Mart: Financial Statement Analysis WAL-MART FINANCIAL STATEMENT ANALYSIS Company Description Wal-Mart Stores Inc. (WMT) is a world largest grocery chain and retail stores. The company operates 8000 stores across three business segments which include apparel, groceries, electronics and small appliances. While the company operates globally, half of the company stores are located in the United States. To complete in the international markets, Wal-Mart also operates its business through subsidiaries in Canada, Argentina, China,
HP: Financial Statement Analysis There are many approaches one could use to analyze the health, stability as well as financial performance of a business entity. One such approach involves a thorough review of the financial statements of the concerned entity. Regarded the leading personal computers manufacturer in the world, Hewlett-Packard - HP amongst other things concerns itself with the manufacture as well as development of both computer hardware and software. In
The data must be absolutely correct. 3. Effects of Price Level Changes: Price levels changes often make the comparison of figures difficult over a period of time. Changes in price affect the cost of production, sales and also the value of the assets. Therefore, it is necessary to make proper adjustment for price-level changes before any comparison. 4. Quality factors are ignored: Ratio analysis is a technique of quantitative analysis and
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