What is the purpose of financial statement analysis

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Reference no: EM133816518

Homework: Financial Statement Analysis

When the fiscal year ends for a company, it is important to analyze how the company is performing to determine if there are issues to work on and successes to expand on. As the owner of your Sales and Service company, you are interested in finding out how well the company has performed in the first two years of operations. Complete the following tasks using the Module Written Homework Analysis Template. Be sure to cite your sources using proper APA format.

Calculations Tab Instructions:

A. Calculate a horizontal and vertical analysis for the income statement and balance sheet for the first two years of operations for your Sales and Service company.

B. Calculate the following ratios for QBCloud and interpret the results:

C. Debt Ratio (Total Liabilities/TotalAssets)

D. Current Ratio (Current Assets/current liabilities)

E. Profit Margin (Net Income/Total Income)

Questions Tab Instructions:

A. Address these questions regarding financial statement analysis. Cite your sources.

B. What is the purpose of financial statement analysis? Get the instant assignment help.

C. Who uses financial statement analysis? What do they use it for?

D. Address the following questions regarding your analysis findings:

E. Review the horizontal analysis.

F. By what percentage has Checking changed over the year? Has it increased or decreased?

G. By what percentage has net income changed over the year? Has it increased or decreased?

H. Review the vertical analysis.

I. What expense is the highest percentage of total income on the income statement?

J. What asset is the highest percentage of total assets on the balance sheet?

K. Review the ratio analysis.

L. Define the debt ratio. What does this company's debt ratio indicate? Does it fall within the benchmark?

M. Define the current ratio. What does this company's current ratio indicate? Does it fall within the benchmark?

N. Define profit margin. What does this company's profit margin indicate? Does it fall within the benchmark?

Reference no: EM133816518

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