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Financial Statement Analysis Overview

To identify weaknesses and strengths of a business to enable appropriate actions, improve financial situations, and analyze types of ratios. The document discusses the objectives of financial statement analysis and types of ratio analysis including liquidity ratios like the current and acid test ratios, efficiency ratios such as inventory turnover and average collection period, and profitability ratios like gross profit margin and net profit margin. Examples and page references are provided.

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Nur Amira Nadia
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4 views7 pages

Financial Statement Analysis Overview

To identify weaknesses and strengths of a business to enable appropriate actions, improve financial situations, and analyze types of ratios. The document discusses the objectives of financial statement analysis and types of ratio analysis including liquidity ratios like the current and acid test ratios, efficiency ratios such as inventory turnover and average collection period, and profitability ratios like gross profit margin and net profit margin. Examples and page references are provided.

Uploaded by

Nur Amira Nadia
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

FINANCIAL

STATEMENT
ANALYSIS
CHAPTER 7
PREPARED BY: NURUL HASSANAH BINTI HAMZAH
OBJECTIVE OF FINANCIAL
STATEMENT ANALYSIS

To enable the To enable the


To identify the
business to take the business to improve
weaknesses as well
appropriate steps or its overall financial
as the strengths of a
actions to overcome situation in the
business
any weaknesses future
Type of ratio
analysis

Efficiency Profitability
Liquidity Ratios
Ratios Ratios

Average
Collection
Acid Test or Inventory Period or Gross Profit Net Profit
Current Ratio
Quick Ratio Turnover Ratio Debtor Margin Margin
Collection
Period
LIQUIDITY
RATIOS
Refer page 195 & 196
EFFICIENCY RATIOS
Refer page 196 & 197
PROFITABILITY RATIOS
Refer page 198 & 199
EXAMPLE
Part B Question 4 June 19

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