Financial Statement Analysis

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A Study on Financial Statement Analysis

A Study on Financial Statement Analysis

The Indian banking Industry is in the middle of an IT revolution, Focusing on the expansion of retail and rural banking. Players are becoming increasingly customer - centric in their approach, which has resulted in innovative methods of offering new banking products and services. Banks are now realizing the importance of being a big player and are beginning to focus their attention on mergers and acquisitions to take advantage of economies of scale and/or comply with Basel II regulation.“Indian banking industry assets are expected to reach US$1 trillion by 2015 and are poised to receive a greater infusion of foreign capital,” says Prathima Rajan, .The banking industry should focus on having a small number of large players that can compete globally rather than having a large number of fragmented players. Financial statement analysis (or financial analysis) is the process of reviewing and analyzing a company's financial statements to make better economic decisions. These statements include the income statement, balance sheet, statement of cash flows, and statement. Financial statement analysis is a method or process involving specific techniques for evaluating risks, performance, financial health, and future prospects of an organization. It is used by a variety of stakeholders, such as credit and equity investors, the government, the public, and decision-makers within the organization. These stakeholders have different interests and apply a variety of different techniques to meet their needs. For example, equity investors are interested in the long-term earnings power of the organization and perhaps the sustainability and growth of dividend payments. Creditors want to ensure the interest and principal is paid on the organizations debt securities (e.g., bonds) when due.Common methods of financial statement analysis
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Financial Statement Analysis in Municipalities and an Application

Financial Statement Analysis in Municipalities and an Application

The analysis of financial statements in the private sector had initially occurred in the 19th century in the US with the changes in the company structures. During this period, family owned enterprises came to be replaced by larger companies, which were in need of great financial resources. Larger companies which failed to meet their resource needs from their equities started to go into debt. In order to foresee whether the debt they’ve granted will be paid back, creditors have started to apply financial statement analysis methods to determine the financial standing of companies. In addition thereto, the emergence of conglomerates caused professional managers other than family members to assume roles in company management. Shareholders who left managerial position to professional managers also felt the need to measure the success of managers and this need caused the emergence of financial statement analysis methods (Horrigan, 1968, p:284-285). During the first implementations, assets were classified as current assets and fixed assets, while the “current ratio” emerged with the comparison of current assets and short term liabilities in the 1880s (Horrigan, 1968, p:285). With Wall's study, profitability margins came to be used for the first time in analysis. Another significant development in this period however the development of the percentage method and analysis method by Lawrance Chamberlain in his book titled "The Principles of Bond Investment". In the following years, the sector ratios and Trend Analysis method came to be used in the analyses (Wall, 1919, p:229-243). As a result, although its first implementations were very simple, financial statements analysis methods developed in course of time are nowadays used commonly by users of financial statements in order to determine companies’ financial standing in decision making processes and make forecasts into the future.
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Financial statement analysis of OPTCL, BBSR

Financial statement analysis of OPTCL, BBSR

The basis of financial planning analysis and decision making is the financial information (Statements). Financial statements are needed to predict, compare and evaluate a firm’s earning ability. It is also required to aid in economic decision making investment and financing decision making. The financial information of an enterprise is contained in the financial statements. The use of financial statement analysis in investment decision has been addressed by a series of authors. John Myer, a renowned authority on Financial Statements Analysis, has referred that in the initial years of 20th century, the bankers and securities exchange authorities were extensively relying on the financial statements of the companies for analysis, monitoring and control of the activities and performance of businesses. The history, principles and financial statement analysis has been referred by another authority also: Kennedy and McMullen. According to Gautam, U. S. (2005) Financial Statement is generally explained as financial information which is the information relating to financial position of any firm in a capsule form. Financial statement, according to J. A. Ohison (1999) was defined as a written report that summarizes the financial status of an organization for a stated period of time.
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THE FINANCIAL STATEMENT ANALYSIS OF TAMIL NADU NEWSPRINT AND PAPERS LIMITED, KARUR

THE FINANCIAL STATEMENT ANALYSIS OF TAMIL NADU NEWSPRINT AND PAPERS LIMITED, KARUR

The scope of study is limited to Tamil Nadu News Print and Papers Limited, Karur. The report is expected to provide sufficient information about the financial statements of Tamil Nadu News Print and Papers Limited so that to evaluate the past performance, present financial position, liquidity situation and give the future prospects of its operations. The main purpose of analysis of the financial statements of Tamil Nadu News Print and Papers Limited is to determine the present profitability and financial position of the Company and decide about its future prospects in terms of earning capacity and its operational efficiency. LIMITATIONS OF THE STUDY
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Corporate Social Responsibilities through Financial Statement Analysis of Mercantile Bank Limited

Corporate Social Responsibilities through Financial Statement Analysis of Mercantile Bank Limited

a satisfactory level of recovery rate from its investing activities, Banks should have a sound customer service. Identifying the reliable and real clients in providing cash, credit and advances is essential for banking business and application of an appropriate customer services can help this respect. As customers are one of the most important considerations in the personal Banking, they should be given a chance to exchange their views and ideas about the Bank’s products and services. This study to measure customer satisfaction on Consumer Credit Scheme (CCS) offered by the banks in Bangladesh as it is one of the most attractive Schemes of the sector. The customers are getting small amount of loan without any security. So there are high respond from customers’ side. This scheme is generally for the service-holders to meet their emergency needs such as marriage, medical treatment/surgery or educational expenses of their Abstract: Bank has a significant role in the economic development process of a country. Today banking sectors are being proved the most important sector in the economy of Bangladesh. Banks are the custodians of the society economic resources and total economies development depends on the proper utilization of these resources. The successful banking business ensures the growth of the economy by the effective uses of the funds. In order to developing the national economy, banks keep in mind going for lending, maintaining safety, liquidity and profitability. Mercantile Bank Limited was introduced in Bangladesh as a banking company under the Company Acts, 1994 and commenced operation on 2nd June 1999. Numerically it is just another commercial bank, one of now operating in Bangladesh. But the finders are committed to make different and a bit special qualitatively. This bank has new vision to fulfill and a new goal to achieve and try to reach new height for realizing its dream. This study is highlighted on the basis of Performance analysis of Mercantile Bank Ltd. where different types of important financial ratios of MBL to reduce its effective social responsibilities. This study tried to include all the necessary information related to this topic. While preparing this research I have always tried my level best to make it authentic and at the same time easily understandable. For this secondary data is collected as number of reference books to get the theoretical backup.
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MHSA 8630 Healthcare Financial Management Financial Statement Analysis

MHSA 8630 Healthcare Financial Management Financial Statement Analysis

information is weighted according to the size/scale of the organization’s operations. For income statement entries under common size analysis, all entries are divided by total revenues. For balance sheet entries, all entries are divided by total assets. All subsequently estimated financial ratios such be directly comparable against peer group as well as benchmark.

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Survey of Accountancy in Generally Accepted Accounting Principles and Financial Statement Analysis

Survey of Accountancy in Generally Accepted Accounting Principles and Financial Statement Analysis

Upon analysis of the financial reporting of Glenwood Heating, Inc. and Ead’s Heating, Inc. I would recommend Ead’s Heating, Inc. as the better investment option out of the two. While many of the ratios may lead Glenwood to look like the more desirable option, Ead’s is more prepared to continue operations in the future and has shown a conservative and sustainable approach to their operations. Ead’s Heating opted to use double-declining balance to depreciate their equipment faster than the straight-line approach of Glenwood, they have secured an eight-year capital lease for their equipment while Glenwood has only secured a rental agreement through the next year, and Ead’s uses a more conservative approach to calculate their Allowance for Bad Debt.
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Financial Statement Analysis for Nonprofit Organizations

Financial Statement Analysis for Nonprofit Organizations

The logic used to read and interpret financial statements, thanks to a system of indexes, starts from the reading of accounting values in accordance with the defined prospects: different activities and qualified subjects that can establish relationships with the organizations (partners and members, government bodies, connected subjects inside the group).

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32 Financial Statement Analysis

32 Financial Statement Analysis

1. GoodRed Corp. started operations at the beginning of Year 1. Given the pre-closing (but post adjustments) trial balance below, prepare the income statement for Year 1 and the balance sheet at the end of Year 1. Classify balance sheet items into assets, liabilities, and equity. Further classification into subcategories, e.g., current versus non-current is NOT required. T-accounts are neither required nor expected.

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Financial statement analysis of Kraš plc

Financial statement analysis of Kraš plc

Marža profita je pokazatelj koji se računa na temelju podataka iz računa dobiti i gubitka gdje se dobit (bruto, neto, EBIT ili EBITDA – engl. earnings before interest, [r]

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Financial health indicators: an analysis of financial statement information to determine the financial health of DoD contractors

Financial health indicators: an analysis of financial statement information to determine the financial health of DoD contractors

One single method of financial statement analysis may provide a limited view into the financial health of a company. Each analysis has its own limitations. For example, vertical analysis recasts each statement as a percentage of sales, total assets, total liabilities and equity, or any category selected. This analysis provides only proportional information. Another example is that horizontal analysis recasts each statement in percentage terms using a base year number rather than sales or some other line item on a financial statement. This analysis provides trend information, which offers a clearer indication of growth and decline compared to vertical analysis statements. However, when both methods of analysis are set up over multiple time periods, it is easier to recognize significant events or changes (Revsine et al., 2002). A combination of different types of analyses used by an end user may be better than one single type of analysis. A mixture of the financial analysis tools can reveal meaningful details about the current state of the company as well as reveal any changes that might affect the future state of the company (Revsine et al., 2002). This following section discusses multivariate analysis, which includes bankruptcy ratios and fraud ratios.
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The Benefits of Financial Statement Comparability

The Benefits of Financial Statement Comparability

Several factors point toward the importance of “comparability” of financial statement information across firms in financial analysis. According to the Securities and Exchange Commission (SEC) [2000], when investors judge the merits of investments and comparability of investments, efficient allocation of capital is facilitated and investor confidence nurtured. The usefulness of comparable financial statements is underscored in the Financial Accounting Standards Board (FASB) accounting concepts statement. Specifically, the FASB [1980, p. 40] states that “investing and lending decisions essentially involve evaluations of alternative opportunities, and they cannot be made rationally if comparative information is not available” (our emphasis). 1 Financial statement analysis textbooks almost invariably stress the importance of comparability across financial statements in judging a firm’s performance using financial ratios. 2 For instance, Stickney and Weil [2006, p. 189] conclude that, “Ratios, by themselves out of context, provide little information.” Despite the importance of comparability, a measure of financial statement comparability is not specified and there is little evidence on its benefits to financial statement users.
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Statement of Financial Accounting Standards No. 130

Statement of Financial Accounting Standards No. 130

4. Some users of financial statement information expressed concerns about the increasing number of comprehensive income items that bypass the income statement. Currently, an enterprise is required to report the accumulated balances of those items in equity. However, because of the considerable diversity as to how those balances and changes in them are presented in financial statements, some of those users urged the Board to implement the concept of comprehensive income that was introduced in FASB Concepts Statement No. 3, Elements of Financial Statements of Business Enterprises (which was superseded by FASB Concepts Statement No. 6, Elements of Financial Statements), and further described in FASB Concepts Statement No. 5, Recognition and Measurement in Financial Statements of Business Enterprises. 5. As a first step in implementing the concept of comprehensive income, this Statement requires that all items that meet the definition of components of comprehensive income be reported in a financial statement for the period in which they are recognized. In doing so, this Statement amends Statements 52, 80, 87, and 115 to require that changes in the balances of items that under those Statements are reported directly in a separate component of equity in a statement of financial position be reported in a financial statement that is displayed as prominently as other financial statements. Items required by accounting standards to be reported as direct adjustments to paid-in capital, retained earnings, or other nonincome equity accounts are not to be included as components of comprehensive income. (Refer to paragraphs 108-119.)
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Instructions on the Completion of a Personal Financial Statement

Instructions on the Completion of a Personal Financial Statement

The information contained in this statement is provided to induce you to extend or to continue the extension of credit to the undersigned or to others upon the guaranty of the undersigned. The undersigned acknowledges and understands that you are relying on the information provided herein in deciding to grant or continue credit or to accept a guaranty thereof. Each of the undersigned represents, warrants, and certifies that (1) the information provided herein is true, correct and complete and gives a correct and complete showing of the financial condition of the undersigned, (2) the undersigned has no liabilities direct, indirect or contingent except as set forth in this statement, and (3) legal and equitable title to all assets listed herein is in the undersigned's sole name, except as may be herein otherwise noted. Each of the undersigned agrees to notify you immediately and in writing of any change in name, address, or employment and of any material adverse change (1) in any of the information contained in this statement or (2) in the financial condition of any of the undersigned or (3) in the ability of any of the undersigned to perform its (or their) obligations to you. In the absence of such notice or a new and full written statement, this should be considered as a continuing statement and substantially correct. You are authorized to make all inquiries you deem necessary to verify the accuracy of the information contained herein, and to determine the credit-worthiness of the undersigned and the undersigned hereby authorizes all persons of whom you make such inquiries to respond thereto in full. Each of the undersigned authorizes you to answer questions about your credit experience with the undersigned.
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Statement of Financial Accounting Standards No. 117

Statement of Financial Accounting Standards No. 117

they believe will provide meaningful information. Most respondents to the Exposure Draft that commented on this matter agreed that this Statement should not preclude making so-called operating or nonoperating or other distinctions within each of this Statement's required classes of net assets. A few respondents and FASB task force members suggested, however, that because terms such as operating income, operating profit, operating surplus, operating deficit, and results of operations are used with different meanings, some constraints are necessary to avoid focusing on undefined measures that may be misunderstood. The Board decided that if an intermediate measure of operations is reported, it should be in a financial statement that, at a minimum, reports the change in unrestricted net assets for the period. This Statement also specifies that if an organization's use of the term operations is not apparent from the details provided on the face of the statement, a note to financial statements should describe the nature of the reported measure of operations or the items excluded from operations. Appendix C illustrates how an intermediate measure of operations might be presented in financial statements. Comparative Financial Statements
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INTEGRITY OF FINANCIAL STATEMENT : BIG IS NOT GUARANTEE

INTEGRITY OF FINANCIAL STATEMENT : BIG IS NOT GUARANTEE

In Indonesia, a financial scandal ever to seize attention namely scandal conducted by BUMN such as PT. Kimia Farma (Persero) Tbk and PT. Kereta Api Indonesia (Persero) who has been doing the manipulation of financial statements with inflate profits. Then, the scandal conducted by PT. Katarina Utama with the forgery of financial statements, in 2008 and 2009. Cheating scandal in the presentation of the financial statements back tumultuous world in mid- 2015. This scandal is performed by one of the big corporate in Japan, that is Toshiba. The financial scandal in which Toshiba is alleged to have profit to inflate US $1.2 billion over the last five years. It eventually made CEO of Toshiba i.e. Hisao Tanaka and two other company Chairman, Norio Sasaki and Atsutoshi Nishida stepped down from the leadership of the company.
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Detection of Financial Statement Fraud using Data Mining Technique and Performance Analysis

Detection of Financial Statement Fraud using Data Mining Technique and Performance Analysis

Financial statement fraud in particular has cast rapidly increasing adverse impact not only on individual investors but the overall stability of global economies. Although there are minor variations in its definition, a financial statement fraud is defined by the Association of Certified Fraud Examiners as ―The intentional, deliberate, misstatement or omission of material facts, or accounting data which is misleading and, when considered with all the information made available, would cause the reader to change or alter his or her judgment or decision. Another motivation for management fraud is the need for continuing growth. Companies unable to achieve similar results to past performances may engage in fraudulent
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Statement of Financial Accounting Standards No. 34

Statement of Financial Accounting Standards No. 34

54. Some respondents to the Discussion Memorandum and to the Exposure Draft observed that limiting capitalized interest to interest on borrowings would preclude the "all-equity" enterprise from capitalizing interest, even though it incurs an economic cost of the same order as an enterprise that has borrowed funds. The Board concluded that, despite that consequence, capitalization of interest on borrowings in the circumstances specified in this Statement is preferable to the alternatives of (a) excluding interest from asset acquisition cost in all circumstances or (b) imputing interest on equity capital. In the Board's view, the fact that the present accounting framework does not recognize all economic costs should not control accounting for the costs that are recognized. Moreover, an "all-equity" enterprise is not the same as an enterprise that has borrowed funds. (Similarly, an enterprise that is making substantial expenditures for asset construction differs from one that is not.) Those who assert that comparability among enterprises would be greater if all interest cost were expensed would create an illusion of comparability that may disguise the differences in facts.
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OBLIGATED GROUP FINANCIAL STATEMENT (UNAUDITED)

OBLIGATED GROUP FINANCIAL STATEMENT (UNAUDITED)

In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360), which requires that a disposal of a component of an entity or a group of components of an entity be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when it meets the criteria to be classified as held for sale, or is disposed of by sale or other than by sale. It also requires an entity to present, for each comparative period, the assets and liabilities of a disposal group that includes a discontinued operation separately in the asset and liability sections, respectively, of the statement of financial position. The adoption of ASU 2014-08 is required for Sharp on October 1, 2015; Sharp’s management is evaluating the potential impact on Sharp’s obligated group financial statements.
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Statement of Financial Accounting Standards No. 5

Statement of Financial Accounting Standards No. 5

give an estimate of the possible loss or range of loss or state that such an estimate cannot be made. Disclosure is not required of a loss contingency involving an unasserted claim or assessment when there has been no manifestation by a potential claimant of an awareness of a possible claim or assessment unless it is considered probable that a claim will be asserted and there is a reasonable possibility that the outcome will be unfavorable. 11. After the date of an enterprise's financial statements but before those financial statements are issued, information may become available indicating that an asset was impaired or a liability was incurred after the date of the financial statements or that there is at least a reasonable possibility that an asset was impaired or a liability was incurred after that date. The information may relate to a loss contingency that existed at the date of the financial statements, e.g., an asset that was not insured at the date of the financial statements. On the other hand, the information may relate to a loss contingency that did not exist at the date of the financial statements, e.g., threat of expropriation of assets after the date of the financial statements or the filing for bankruptcy by an enterprise whose debt was guaranteed after the date of the financial statements. In none of the cases cited in this paragraph was an asset impaired or a liability incurred at the date of the financial statements, and the condition for accrual in paragraph 8(a) is, therefore, not met. Disclosure of those kinds of losses or loss contingencies may be necessary, however, to keep the financial statements from being misleading. If disclosure is deemed necessary, the financial statements shall indicate the nature of the loss or loss contingency and give an estimate of the amount or range of loss or possible loss or state that such an estimate cannot be made. Occasionally, in the case of a loss arising after the date of the financial statements where the amount of asset impairment or liability incurrence can be reasonably estimated, disclosure may best be made by supplementing the historical financial statements with pro forma financial data giving effect to the loss as if it had occurred at the date of the financial statements. It may be desirable to present pro forma statements, usually a balance sheet only, in columnar form on the face of the historical financial statements.
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