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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

Fundamental Interpretations Made from Financial Statement Data

Chapter 3 Outline


Financial Ratios and Trend Analysis

  1. Company Data Over Time
  2. Company Data Compared to Industry Data Over Time
Return on Investment
  1. Significance
  2. Method of Calculating
The DuPont Model--An Expansion of the ROI Calculation
  1. Margin and Turnover
  2. Significance of Model
  3. Rules of Thumb for ROI, Margin and Turnover

Return on Equity and Rules of Thumb

Working Capital and Measures of Liquidity

  1. Working Capital
  2. Current Ratio
  3. Acid-test Ratio
  4. Rules of Thumb for Current Ratio and Acid-test Ratio

Illustrations of Trend Analysis

  1. Profitability and Liquidity Data
  2. Return on Investment and Return on Equity
  3. Margin and Turnover
  4. Working Capital and Current Ratio
  5. Percent Earned on Net Worth