Financial Statement Analysis

Financial Statement Analysis Essay example
College
Essay
Finance & Accounting
Pages 15 (3765 words)
Download 0
Profitability Analysis – Sainsbury PLC v/s Tesco PLC Introduction The preparation and developments of financial statements are carried out in order to provide a true picture of the company regarding its financial performance and position. What company achieved, what company lost and what company maintained in financial aspects, all are presented under financial statements of a company…

Introduction

For this reason, the actual presentation of financial statements with the absolute figures becomes meaningless as it does not provide a rational basis for comparing with the competitor or with the industry. The industry and competitor might have several differences due to which it is not practically justified that the analysis between the two should be made. For instance, if a company has revenues of $5 million and one of its competitors has the revenues of $500,000 then on the basis of these absolute figures, there is no comparison between the two companies. However, if the growth in revenue of the former company is, let’s say 6% and the latter company has growth in revenues of around 8%, then there is a rationale of analyzing both the companies as the same footing for comparison is available now. In short, in the absence of reasonable commonalities between the financial aspects of the two companies, the comparison of the two companies turns out to be meaningless. The best way to make a comparison in financial aspect between the two companies is to undertake financial ratio analysis. This analysis provides a common platform for the companies so that their performance can be compared on reasonable basis. ...
Download paper
Not exactly what you need?

Related papers

Financial Statement Analysis Report
The preparation of financial statement analysis requires financial ratios, accounting data from financial statements. The ratio assists in measuring strengths and weaknesses of the firm and allows trends and comparisons with other firms within the industry to be identified. It also covers the areas of liquidity, operating profits, financing and stockholders' return on investments (Collier, Grai,…
Financial Statement Analysis Professional Challenge
The financial performance of Burger King and Sonic were used to compare McDonald’s financial performance during fiscal years 2010, 2009, and 2008. McDonald’s revenues grew by 5.8% in 2010 in comparison with the previous year. McDonald’s 2010 sales were 43 times larger than Sonic and 9.63 times larger than Burger King. One of the reasons McDonald’s generated such a large amount of sales is…
Financial statement analysis
For the purpose of this paper, the organization of Alcatel-Lucent Enterprise has been chosen. This company is known for developing and implementing end to end solutions for other companies. It’s the company’s goals to design solutions that are aligned with their clients’ objectives. The various kinds of solutions they provide cover the areas of professional services, support services and…
Group Research Project: Financial Statement Analysis
Part one: Calculation of Ratios: The purpose of this research is that at the end of the report the learner will be able to Develop online business research skills., Develop timely work patterns; adherence to assigned work schedule., Gain familiarity with real annual reports for companies in a chosen industry., Identify financial information needed to compute selected ratios from real annual…
financial statement analysis
The company aims at creating a great guest love hotel with over 6,76000 hundred rooms in approximate 4600 hotels in one hundreds countries (Intercontinental Hotel Group, 2013). Additionally, the directors report indicates that Intercontinental Hotel and Group provide employment to more than345, 000 people globally for instance, in 2011 the company provided employment opportunities to more than…
FINANCIAL STATEMENT ANALYSIS
Another part of the paper presents the qualitative interpretation of the quantitative results. That is, the interpretation of the company’s ratio results and their significance. Lastly, a summary of the company’s financial position as reflected by the analysis has been produced together with a suitable plan of action. The overview of Procter and Gamble The company, based in the United States,…
Valuation Financial statement analysis
The company manufactures and distributes different brands specializing in consumer products including hygiene, nutritional and personal care products. Further, its portfolio has items such as Lipton, Knorr, Magnum, Hellmann’s, Lux, Dove, Omo and Axe. Notably, the company product retails in more than 170 countries around the globe.