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Cover
Accounting: What the Numbers Mean, 5/e
David H. Marshall, Millikin University
Wayne W. McManus, International College of the Cayman Islands
Daniel F. Viele, Webster University
Financial Statement Analysis

Chapter 11 Outline


Interpretation of Financial Condition and Results of Operations

  1. Liquidity Measures
    1. Review of working capital, current ratio and acid-test ratio.
  2. Activity Measures
    1. Turnover.
      1. Significance and general model.
    2. Turnover calculations illustrated.
      1. Accounts receivable.
      2. Inventory.
      3. Plant and equipment.
      4. Days' sales in accounts receivable.
      5. Days' sales in inventory.
  3. Profitability Measures
    1. Review of return on investment and return on equity.
    2. Price/earnings ratio (earnings multiple).
      1. Significance.
      2. Illustration.
    3. Dividend yield.
    4. Dividend payout ratio.
      1. Dividend policy.
    5. Preferred dividend coverage ratio.
  4. Financial Leverage Ratios
    1. Review and illustration of financial leverage.
    2. Debt ratio.
    3. Debt/equity ratio.
    4. Times interest earned.
  5. Book Value Per Share of Common Stock
  6. Common Size Financial Statements
  7. Other Operating Statistics

Summary of Financial Statement Analysis Ratios









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