...to trade at lower costs creating an even lower risk for the investor. In order to attract investors into less liquid markets, the interest rate must be higher and worth the investment. Thus the yield to maturity is even lower on Z, than all others. 2. Explain how an economist could use the slope of the yield curve to analyze the probability that a recession will occur and why the spread may matter. The shape of the yield curve represents what the interest rates look like against the time to maturity. When the economy is in a generally “good” state, the shape of the yield curve will slope slightly upward. This shape is a representation that as length of maturity increases, so does the interest rate. Investors would expect a greater return for investing their funds for a longer term. Prior to a recession, however, the slope of the curve becomes inverted. This downward slope means that the interest rates are higher for shorter term bonds than long term, giving an indication of a slowing economy. Investors will settle for lower...
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...06/29/2006 06:16 PM Page 150 FIRST PAGES 5 ANALYSIS OF FINANCIAL STATEMENTS Reviewing and Assessing Financial Information Starting Point Go to www.wiley.com/college/Melicher to assess your knowledge of the basics of financial statement analysis. Determine where you need to concentrate your effort. What You’ll Learn in This Chapter ▲ ▲ ▲ ▲ ▲ ▲ ▲ The five basic types of financial ratios How to use financial ratios properly in order to achieve financial growth When to use specific ratios in different situations How internally generated financing occurs The effect of ratio analysis on long-term financial planning How to read a financial statement The application of the cost-volume-profit analysis concept After Studying This Chapter, You’ll Be Able To ▲ ▲ ▲ ▲ ▲ ▲ Distinguish the three categories of ratio analysis Compare and contrast financial statements from different companies Examine the link between asset investment and sales growth Apply the major components of Du Pont analysis Analyze the quality of financial reports Use analysis methods to evaluate profit levels Goals and Outcomes ▲ ▲ ▲ ▲ ▲ ▲ Analyze and interpret financial statements Explain the categories of ratio analysis Perform the basic types of financial ratios Manage the application of ratios to evaluate business performance Prepare the requirements for external financing Evaluate the financial viability of particular business alternatives 2059T_c05_150-188...
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...Lecture Handouts for Chapter 5 Chapter 5 is covered in lectures 31 and 32. Risk and Return The return from an investment is the change in market price, plus any cash payments received due to ownership, divided by the beginning price. The risk of a security can be viewed as the variability of returns from those that are expected. Measurement of Risk The expected return is simply a weighted average of the possible returns, with the weights being the probabilities of occurrence. The conventional measure of dispersion, or variability, around an expected value is the standard deviation σ. The square of the standard deviation σ2 is known as the variance (σ2). The standard deviation can sometimes be misleading in comparing the risk, or uncertainty, surrounding alternative investments if they differ in size. To adjust for the size, or scale, problem, the standard deviation can be divided by the expected return to compute the coefficient of variation (CV) – a measure of “risk per unit of expected return.” Investor’s Attitude towards Risk Investors have different attitudes while deciding between the risk and return in an investment. Investors are, by and large, risk averse. This implies that they demand a higher expected return, the higher the risk. The expected return from a portfolio The expected return from a portfolio (or group) of investments is simply a weighted average of the expected returns of the securities comprising that portfolio. The weights are equal to the proportion...
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...Financial Management: PepsiCo and Coca-Cola 2009 Annual Reports BUS 500 Instructor: Gary Shelton December 7, 2010 Abstract In this paper I will use the information obtained from the PepsiCo and Coca-Cola 2009 annual reports to determine financial information about these companies. I will answer questions about the companies assets and liabilities, profits, and if they can satisfy stockholders. What conclusions can you make about each company’s ability to pay current liabilities? A company’s liabilities are their legal debts and obligations. Liabilities can come up during the company’s business operations and are settled over time. They are settled through by transferring money, goods or services. A list of a company’s liabilities can be found on the balance sheet for the company. Included in the liabilities are loans, accounts payable, mortgages, deferred revenues, and accrued expenses. A company’s ability to pay its liabilities can be determined by analyzing the amount of assets as opposed to the amount of liabilities. To do this you will need to find the current ratio for the company. The current ratio is used to determine if a company’s short-term or current assets are available to pay off its short-term or current liabilities. The liabilities of PepsiCo can be found on the company’s Consolidated Balance Sheet. PepsiCo’s total current liabilities equal 8.765 million dollars. Its total liabilities equal 22.406 million dollars. Its total current assets...
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...ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS: CASE STUDIES THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF Bachelor of Technology in Mining Engineering By SUDIP DAS Roll: 10605038 DEPARTMENT OF MINING ENGINEERING NATIONAL INSTITUTE OF TECHNOLOGY, ROURKELA 2010 ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS: CASE STUDIES THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF Bachelor of Technology in Mining Engineering By SUDIP DAS Roll: 10605038 Under the guidance of Prof. D.P.TRIPATHY DEPARTMENT OF MINING ENGINEERING NATIONAL INSTITUTE OF TECHNOLOGY, ROURKELA 2010 National Institute of Technology Rourkela CERTIFICATE This is to certify that the thesis entitled “ANALYSIS AND INTERPRETATION FINANCIAL STATEMENTS: CASE STUDIES” submitted by Sri Sudip Das, Roll No: 10605038 in partial fulfillment of the requirements for the award of Bachelor of Technology degree in Mining Engineering at the National Institute of Technology, Rourkela (Deemed University) is an authentic work carried out by him under my supervision and guidance. To the best of my knowledge, the matter embodied in the thesis has not been submitted to any other University/Institute for the award of any Degree or Diploma. Date: (Prof. D.P. TRIPATHY) Dept. of Mining Engineering National Institute of Technology Rourkela-769008 ACKNOWLEDGEMENT I wish to express my deep sense of gratitude and indebtedness...
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...ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS: CASE STUDIES THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF Bachelor of Technology in Mining Engineering By SUDIP DAS Roll: 10605038 DEPARTMENT OF MINING ENGINEERING NATIONAL INSTITUTE OF TECHNOLOGY, ROURKELA 2010 ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS: CASE STUDIES THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF Bachelor of Technology in Mining Engineering By SUDIP DAS Roll: 10605038 Under the guidance of Prof. D.P.TRIPATHY DEPARTMENT OF MINING ENGINEERING NATIONAL INSTITUTE OF TECHNOLOGY, ROURKELA 2010 National Institute of Technology Rourkela CERTIFICATE This is to certify that the thesis entitled “ANALYSIS AND INTERPRETATION FINANCIAL STATEMENTS: CASE STUDIES” submitted by Sri Sudip Das, Roll No: 10605038 in partial fulfillment of the requirements for the award of Bachelor of Technology degree in Mining Engineering at the National Institute of Technology, Rourkela (Deemed University) is an authentic work carried out by him under my supervision and guidance. To the best of my knowledge, the matter embodied in the thesis has not been submitted to any other University/Institute for the award of any Degree or Diploma. Date: (Prof. D.P. TRIPATHY) Dept. of Mining Engineering National Institute of Technology Rourkela-769008 ACKNOWLEDGEMENT I wish to express my deep sense of gratitude and indebtedness to Dr. D.P.Tripathy, Department of...
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...TENNESSEE INSTITUTE OF AGRICULTURE AE02-52 Nursery Financial Management: Basis for Decisions Charles R. Hall Professor Agricultural Economics E12-4115-00-001-02 The Agricultural Extension Service offers its programs to all eligible persons regardless of race, color, national origin, sex, age, religion, disability or veteran status and is an Equal Opportunity Employer. COOPERATIVE EXTENSION WORK IN AGRICULTURE AND HOME ECONOMICS The University of Tennessee Institute of Agriculture, U.S. Department of Agriculture and county governments cooperating in furtherance of Acts of May 8 and June 30, 1914. Agricultural Extension Service, Charles L. Norman, Dean AGRICULTURAL EXTENSION SERVICE THE UNIVERSITY OF TENNESSEE INSTITUTE OF AGRICULTURE AE02-52 NFM: Basis for Decisions Dr. Charles R. Hall Professor and Extension Economist Most nurserymen prefer to concentrate on production rather than planning, recordkeeping and marketing. This management focus may have been adequate during periods of inflation and favorable commodity prices, but the recent economy has demonstrated the serious flaw in this one dimensional approach. Survivors in the next decade will have to increase their emphasis on recordkeeping, planning, profitability analysis, and better monitoring and controls. This does not imply a neglect of production, simply a need for a better balance between the key performance areas. NFM, or nursery financial management will help nursery managers attain this balance...
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...our presentation. Financial analysis is the examination of a business from a variety of perspectives in order to fully understand the financial situation and determine how best to strengthen the business. Financial involves examining historical data to gain information about the current and future financial health of a company. When looking at a specific company, the financial analyst will often focus on the income statement, balance sheet, and cash flow statement. There are two main tools of financial analysis: ratio analysis and cash flow analysis. Ratio analyses is used to evaluate relationships among financial statement items. it is Single and the most important technique of financial analysis in which quantities are converted into ratios for meaningful comparisons, with past ratios and ratios of other firms in the same or different industries. Ratio analysis determines trends and exposes strengths or weaknesses of a firm. Cash flow analysis - An examination of a company's cash inflows and outflows during a specific period. The analysis begins with a starting balance and generates an ending balance after accounting for all cash receipts and paid expenses during the period. Let me start with ratio analyses. The main objective of ratio analysis is to show a firm’s relative strengths and weaknesses. Other objectives of ratio analysis include comparisons for a useful interpretation of financial statements, finding solutions to unfavorable financial statements and to help...
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...Course Code: BUS 40 “COMPARISON OF THE FINANCIAL PERFORMANCES” AND “INTANGIBLE ASSETS IN THE ACCOUNTING DISCLOSURES” OF THE “JAMUNA, DUTCH BANGLA AND BRAC BANK” Table of Content No | Title | Page no | 1 | Executive Summary | 1 | 2 | Ratio Analysis of Jamuna Bank Limited 2009 | 2-3 | 3 | Ratio Analysis of Jamuna Bank Limited 2010 | 3-5 | 4 | Ratio Analysis of Jamuna Bank Limited 2011 | 5-6 | 5 | Compare Ratio Analysis of Jamuna Bank Limited -2009, 2010, 2011(Table no 1) | 6-7 | 6 | Comments | 7 | 7 | Ratio Analysis of Dutch Bangla Bank Limited 2009 | 8-9 | 8 | Ratio Analysis of Dutch Bangla Bank Limited 2010 | 9-10 | 9 | Ratio Analysis of Dutch Bangla Bank Limited 2011 | 10-11 | 10 | Ratio Analysis of Dutch Bangla Bank Limited-2009, 2010, 2011(Table no-2) | 11-12 | 11 | Comments | 12 | 12 | Ratio Analysis of Brac Bank Limited 2009, 2010, 2011 | 13-16 | 13 | Compare Ratio Analysis of Brac Bank Limited -2009, 2010, 2011(Table no-3) | 16 | 14 | Comments | 16 | 15 | Intangible Assets | 17 | 16 | Finding | 17 | 17 | Conclusion | 18 | Executive Summary: Ratio analysis is one of the techniques of financial analysis where are used as a yardstick for evaluating the financial condition and performance of a bank analysis and interpretation of various accounting ratios gives a better understanding of financial condition and performance of a bank...
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...File: Chapter 01 The Financial Services Industry: Depository Institutions Multiple Choice [QUESTION] A non-bank depository institution is also referred to as: A. Drift. B. Thrift. C. Phrift. D. Draft. Answer: B Level of difficulty: 1 [QUESTION] Which of the following statements is true? A. A non-bank depository institution is also referred to as drift. B. A non-bank depository institution meets the legal definition of a bank. C. A non-bank depository institution undertakes exactly the same activities like a bank. D. A non-bank depository institution is also referred to as drift and a non-bank depository institution undertakes exactly the same activities like a bank . E. None of the given answers. Answer: E Level of difficulty: 2 [QUESTION] Which of the following statements is true? A. Authorised depository institutions are those that have been granted an authority by the RBA to operate in Australia. B. Authorised depository institutions are those that have been granted an authority by APRA to operate in Australia. C. Authorised depository institutions are those that have been granted an authority by the Australian Government to operate in Australia. D. Authorised depository institutions are those that have been granted an authority by ASIC to operate in Australia. E. None of the given answers. Answer: B Level of difficulty: 2 [QUESTION] Which of the following statements is true? A. Building societies are depository institutions. B...
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...Assessment of Financial Performance of Starbucks during Fiscal Years 2005 – 2009 Assessment of the financial performance of an organization is very important for both the internal as well as external stakeholders. The management of an organization analyzes its financial performance in order to understand present financial of the company. Additionally, the information obtained from the analysis is used for planning and controlling various business activities of the organization. In order to make right decisions for achieving the organizational goals, the analysis of the financial performance is essential. The external users creditors, debtors, investors, analysts and auditor also analyze the financial performance of an organization in order to understand the trend of the past performance as well as present financial position of the company. On the basis of the profitability and solvency of the company, the stakeholders will determine their position regarding relationship with the company. In this paper, the financial position of Starbucks is analyzed for five financial years between 2005 and 2009. Financial statements of Starbucks are used for analyzing the financial position of the organization for the years 2005, 2006, 2007, 2008, 2008 and 2009. Different ratios will be calculated to explain different aspects of the financial performance such as profitability, investment, liquidity etc. In this paper significant ratios of Starbucks are calculated for consecutive...
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...The Best Way to Measure Company Performance 2010-03-04T19:09:43Z By John Hagel III and John Seely Brown Most Wall Street analysts and investors tend to focus on return on equity as their primary measure of company performance. Many executives focus heavily on this metric as well, recognizing that it is the one that seems to get the most attention from the investor community. But is it the best metric? Even though more sophisticated valuation techniques like IRR, CFROI, and DCF modeling have come along, ROE has proven enduring. At one level, this makes sense. ROE focuses on return to the shareholders of the company. If you are a shareholder, this gives you a quick and easy to understand metric. But ROE can obscure a lot of potential problems. If investors are not careful, it can divert attention from business fundamentals and lead to nasty surprises. Companies can resort to financial strategies to artificially maintain a healthy ROE — for a while — and hide deteriorating performance in business fundamentals. Growing debt leverage and stock buybacks funded through accumulated cash can help to maintain a company's ROE even though operational profitability is eroding. Mounting competitive pressure combined with artificially low interest rates, characteristic of the last couple of decades, creates a potent incentive to engage in these strategies to keep investors happy. Excessive debt leverage becomes a significant albatross for a company when market demand for its products heads...
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...FIN 331 Financial Institutions and Markets FINAL TERM PROJECT Spring Quarter Group 5 Shad Boots Alejandro Carral Antonio Fernandez Johnny Pham June 11, 2014 CALIFORNIA STATE UNIVERSITY OF LOS ANGELES CONTENTS Introduction ...................................................................................................................................................................2 Financial Markets ..........................................................................................................................................................3 Quantitative Easing ..............................................................................................................................................5 Financial Institutions .....................................................................................................................................................7 Credit Suisse ........................................................................................................................................................7 Wedbush Securities ..............................................................................................................................................9 Conclusion ................................................................................................................................................................... 11 Appendix A ......................................................
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...Financial Management Instructor: Dr. Daniel Frost The Business Enterprise – BUS508 Strayer University June 12, 2011 Based on your analysis, determine which company is better able to pay current liabilities (debt). Explain your rationale. Based on the analysis of Pepsi Co and Coca Cola Enterprise the company that would be better able to pay current liabilities would be Pepsi Co. The company had retail sales of $108 billion in the year of 2009. In previous years, Coca-Cola would be better to pay current liabilities however the company suffered huge losses in the year of 2008. Pepsi Co has nineteen mega brands that provide revenues in several different markets. Coca Cola has five brands per geographic area. Coca Cola is a large organization that is present in numerous countries around the world. Pepsi Co seems to be better to pay liabilities based upon the several different brands the company provides. If there was an analysis based upon the year of 2010 Coca Cola Enterprise would be better able to pay current liabilities. The company sold $25.5 billion unit cases in 2010 versus the $24 billion in 2009. Coca Cola also had a 13% increase in gross profit and operating revenue. (Coca-Cola, 2011) Pepsi Co in the year 2010 also experienced steady growth in revenue and 12% growth of earnings per share. Pepsi Co continued to deliver top tier financial returns in the year 2010. Pepsi Co Americas Foods provided the largest operating profit of 53% in the year...
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...portfolio expected return for a given amount of portfolio risk, or equivalently minimize risk for a given level of expected return, by carefully choosing the proportions of various assets. Although MPT is widely used in practice in the financial industry and several of its creators won a Nobel memorial prize for the theory,[1] in recent years the basic assumptions of MPT have been widely challenged by fields such as behavioral economics. MPT is a mathematical formulation of the concept of diversification in investing, with the aim of selecting a collection of investment assets that has collectively lower risk than any individual asset. That this is possible can be seen intuitively because different types of assets often change in value in opposite ways.[2] For example, to the extent prices in the stock market move differently from prices in the bond market, a collection of both types of assets can in theory face lower overall risk than either individually. But diversification lowers risk even if assets' returns are not negatively correlated—indeed, even if they are positively correlated.[3] More technically, MPT models an asset's return as a normally distributed function (or more generally as an elliptically distributed random variable), defines risk as the standard deviation of return, and models a portfolio as a weighted combination of assets, so that the return of a portfolio is the weighted combination of the assets' returns. By combining different assets whose returns are not perfectly...
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