Accounts Analysis

 

 

 

 

Using material from Weeks 3 and 4, you and your colleagues will prepare a report that presents the calculated financial ratios and an explanation of what the calculated ratios mean. This is where meaning is found in financial statements.

The Final Presentation:

Should be at least six to eight pages long (excluding cover page and references page) and must be compliant with APA style as outlined by the Writing Center (Links to an external site.)’s APA Style (Links to an external site.)
Your report must include the following:
You must offer an introduction and a strong thesis statement. Tell your reader what you intend to accomplish. You should also identify the limitations that prevent a time-series or cross-sectional analysis of the derived ratios.
Present your ratio analysis and demonstrate your ability to derive meaning from financial statement. Be sure to present ration calculations and interpretations grouped under designated section headings (see example below).
Summarize your findings and identify takeaways for your reader.
The text is a primary reference source and should be used in addition to at least one additional reference.

The following ratios were defined, computed, and reviewed in prior weeks. The computations are the basis for extracting meaning from the financial statements provided.

Each category heading should appear as a section heading in your final report. An adequate description of a ratios meaning can be accomplished in two to four sentences. For example, Total Asset Turnover is a general efficiency ratio that measures management’s efficient or inefficient use of short-term and long-term assets. The ratio is calculated as follows:

Total Asset Turnover = Sales/Total Assets. Assume sales of $8,000,000 and total assets of

$4,000,000. Total Asset Turnover in this example – $8,000,000/$4.000.000 = 2.

Sample Solution

Account analysis is a process in which a skilled auditor or accountant meticulously examines detailed line items in a financial transaction or statement for a specific account. An account analysis can aid in the identification of trends or provide insight into how a specific account is performing. Financial statement analysis is the process of examining a company’s financial statements in order to make decisions and comprehend the organization’s overall health. To become more valuable to investors, shareholders, managers, and other interested parties, financial statements must be assessed through financial statement analysis.

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