Financial Analysis Patrice Brown PPA 602 – Public Financial Management Prof. Ian Cole May 20, 2018 Financial Analysis There are many companies that use financial accounting statements to maintain a financially sound organization. Bookkeepers are able to give a report of the company’s financial health through these statements. These statements are reports that contain information pertaining to the organization’s financial position and results of their activities. (Finkler, et, al., 2013). The purpose of Management's discussion and analysis (MD&A), is to provides an overview of previous operations to develop a framework to meet the goals for the next year (Finkler, et, al., 2013). These outcomes can highlight areas of positive and negative managerial styles and decision making. It offers a breakdown of the overall financial position and results of operations to assist users in assessing whether that financial position has improved or deteriorated as a result of the year’s activities. (Finkler, et, al., 2013). There are four financial statements which are the income statement, statement of owner’s equity, balance sheet, and the statement of cash flows. …show more content…
(Ed.). (2007). MBA essentials. New York: McGraw-Hill Learning Solutions. Dittenhofer, M. A. (2001). Behavioral aspects of government financial management. Managerial Auditing Journal, 16(8), 451-457. Retrieved from https://search-proquest-com.proxy-library.ashford.edu/docview/274638880?accountid=32521 Finkler, S. A., Purtell, R.M., Calabrese, T.D., & Smith, D.L. (2013). Financial management for public, health, and not-for-profit organizations (4th ed.). Upper Saddle River, NJ: Pearson Prentice Hall. Innocent, E. C., Mary, O. I., & Matthew, O. M. (2013). Financial ratio analysis as a determinant of profitability in Nigerian pharmaceutical industry. International Journal of Business and Management, 8(8), 107-117. Retrieved from
Management accounting in organisation is very important for decision-making and to make the business more efficient and therefore increasing its profits. Is the process of preparing accounts that can help managers to make day-to-day and short-term decisions, by providing them with accurate and timely key financial and statistical information...
Gerald, J. M., Samuel, J. Y., W, B. H., & Rabin, J. (2005). How financial managers deal
Countrywide Financial Corporation, one of the nation’s largest business, was on its way to becoming the nation’s largest mortgage lender but later collapsed. Countrywide Financial was founded in 1969 and was the largest provider of home loans in the Unites States. In this paper, I will be discussing strategic plans for the Countrywide Financial Corporation and their SWOT Analysis. Once the reader learn about the Countrywide Financial Corporation the reader should gain a better understanding as to why the company had its issues. About Countrywide Financial Corporation Angelo Mozilo and his partner David Loeb founded Countrywide Financial Corporation in New York in 1969 (John E. Gamble, 2011).
Important factors of a company’s outlook are its financial strength and weaknesses. These factors can be evaluated by reviewing the firm’s financial statements and using ratios to help measure a company’s liquidity, leverage, activity, profitability, and growth. Financial ratios are computed by using the information found in a company’s financial statements: primarily income statement and balance sheet. The calculations from the current year, previous years, and other companies in the industry are used as a basis to identify and ev...
Managerial Accounting addresses those aspects that relates to an individual organization return on investments (ROI). (Albrecht, Stice, Stice, & Skousen, 2002) A company’s profitability depends on periodic attention to its assets turnover and profit margin. This process is designed to support the decision making that adds value to an organization. Organizations are sometimes broad and divisional. Planning, controlling, and evaluating is key in the effective decision making process. (Albrecht, Stice, Stice, & Skousen, 2002) An organization must make decisions about its future products, services, operations, and investments. It must begin a tracking process for cost, quality, and performance. Finally it must analyze the results, and variances, providing feedback to assess areas of personnel, divisions, products, and processes. (Albrecht, Stice, Stice, & Skousen, 2002)
Managers in sustaining organization’s today know that in order for decision’s to be successful they need to be made with the total financial picture in mind. Organization’s who hope to still be doing business in the following years look at all of the implications of investments and taking on additional debt by first reviewing its effects on their bottom line. They do this through the three most important applicable financial statements, the Income Statement, Cash Flow Statement and also the Balance sheet. We will discuss these statements in depth below.
Finkler, S. A., Kovner, C. T. & Jones, C. B. (2007). Financial management for nurse
Subsequent to obtaining the accounting information, managerial accountants will then proceed to use it to plan, evaluate the company performance and also control the business operations. With regards to planning, the managers are required to make decisions concerning the kind of product to introduce into the market, when to introduce the product and where the production should take place. In performance evaluation, individual product lin...
Relevant financial information is presented in a structured manner and in a form easy to understand. They have include basic financial statements, followed by a management discussion and analysis. There have four types of Financial Statements that are Income Statement, Statement of Financial Position, Statement of Changes in Equity and Cash Flow Statement.
Heisinger, K., & Hoyle, J. B.(2012). Accounting for Managers. Creative Commons by-nc-sa 3.0. Retrieved from: https://open.umn.edu/opentextbooks/BookDetail.aspx?bookId=137
The Purpose of Financial Statements The financial statements of a business are used to provide information about the status of the business, set performance targets and impose restrictions on the managers of the firm as well as provide an easier method for financial planning. The financial statements consist of the Profit and Loss Account, Balance Sheet and the Cash Flow Statement. There are four areas of information, which we can collect from a company's financial statements. They are: Ÿ Profitability - This information comes from the Profit and Loss account. Were we can compare this year's profit with the previous years.
Financial statement is concerned with the recording of business transactions in a set of books and the periodic presentations of the financial data recorded in the books of accounts through financial statements like the profit and loss account and balance sheet, to outsiders like creditors, shareholders, employees etc.
( )( )( ) “A financial statement represents a formal report, showing records of financial activities of an entity at the end of an accounting period, in order to review the financial strength and performance of the entity. Where it summarizes the accounting process and reflects the financial effects of a business’s transactions, and the financial position of a business during a particular period of time. Furthermore it serves as the main method of communicating financial information about decisions that have been made by a business entity to inside and outside parties.” ( ) “People who might be interested in an entity’s financial statements need information on that entity for a variety of purposes. Lenders for example need information about the ability of the entity to pay back the loan on time and with interest, employees are a second example as they are interested in information on their employer’s stability and profitability. Potential investors need to know the risk inherited after investing in an entity thus they use financial statements to help them” ( ) “A financial statement is made up of
When we attempt to analyze the financial functions of an organization we find that funds (capital) have to be: Ø Procured Ø Allocated for various activities Ø Used effectively Ø Monitored Further, the results of all these have to be recorded also. All this brings to fore a three dimensional financial process: Ø Financial management Ø Management Accounting Ø Financial Accounting Ø All these three are at the same time separate yet overlapping areas of thee financial functions of an organization. 1. Oval: Financial Reporting Oval: Management Accounting Oval: Financial Management Financial Accounting deals with the measurements and reports of the financial position of the organisation and providies this to external users such as the shareholders, creditors, government agencies, etc. 2.
Rainey, Hal G., and Young Han Chun. 2007. "Public and Private Management Compared."Oxford Handbooks Online. 1 May. 2014. http://www.oxfordhandbooks.com/view/10.1093/oxfordhb/9780199226443.001.0001/oxfordhb-9780199226443-e-5