Fin 534 Assignment 1 Financial Analysis

This four-credit course is for students who major in finance. By the end of this course,

Horizontal analysis allows side by side comparisons on a year to year basis to determine the performance from one year to the next. The company decides on standards to compare the results of the analysis. Standards are researched by checking competitors, internet research of general industry guidelines or standards created from past experience in the company.

Variable Costs. Overall the company had favorable variances in variable costs, excluding the efficiency variance. As expected, since Competition Bikes sold less than predicted, their related costs: direct materials, direct labor, manufacturing overhead and variable expenses were less than budgeted amounts showing a favorable variance. The labor and overhead revenue and spending variances however, showed unfavorable due to actual output despite the changes to the flexible budget. With the prediction of decreases costs based on sales, these costs should have also decreased. There is no further information on why these rates were high, Competition Bikes will need to look into those expenses.

price is $25 per share. The most recent dividend was $1 and the growth rate is 5%.

Using ABC also allows the company to use the Just in Time (JIT) system. This system allows ensures materials are purchased just in time to produce the products, and products are completed just in time for delivery. JIT uses the demand-pull system to receive the order, schedule production, delivered materials, and finished product delivered to the customer. This lessens the amount of excess parts and inventory saving the company money as well.

In order to ascertain how well a company is performing, analyses must be done in regard to the business being stable, including its’ ability to pay debts, how much cash or other liquid assets are available, and whether the organization is viable enough to continue operations. These analyses typically look at income statements, balance sheets, and statements of cash flow, where current and past performance will be studied with the goal of predicting how the company will perform in the future.

3. What are each of the financial statements commonly called in for-profit health care organizations and in not for-profit care organizations?

Commutronics had not accumulated enough profits and had no sufficient capital reserves. The company’s registered capital was therefore very low. The withholding tax rate of

Financial data from past periods of a company, provides a perspective for future outcomes. Investors give proper attention to different ratios. In this report I am analyzing the financial position and financial performance of AT & T, a US. Telecommunication Company. The objective and conclusion of this analysis will be, if is either good or not to invest in the company.

From 2000 to 2001 (exhibit 2), RIM’s revenue grew 160% from $85 million to $221 million. RIM has an extremely strong balance sheet after completing a follow-on equity offering in November 2000 that raised $ 590 million. Therefore, RIM has very strong financial assets for financing their growing opportunities. In term of one single item on balance sheet, RIM has $50.8 million liquid asset to finance any small valued opportunities, and the sales of new equity indicates the investors’ confidence towards RIM.

While analyzing AT& T a few differences are noted. As with Verizon, the current ratio did improve with an increase of five percent from 58% in 2005 to 63% in 2006. However, even though debt to equity decreased for both companies AT & T's decrease was only 4% compared to Verizon's significant decrease of 23%. The net profit margin ratio did opposite changes between the two companies while Verizon's increase not even one full percent AT &T's decreased by almost 3%. Even with these significant changes AT & T's price to earnings, as of 2006, was at 20.89 (www.hoovers.com). These variances tell us a couple of things. First, that AT& T has taken on more debt in 2006 versus 2005, but along with that debt they have been able to increase their net profit margin, helping the company in the way of earnings. The strong price to earnings ratio of 20.89 also shows that the shareholders are not faring too poorly either.

| This assesses a company’s financial durability by examining whether it is at least profitable enough to pay off its interest expenses.

With respect to the company's balance sheet, the company is in a decent financial position despite the losses. In terms of liquidity, the company has remained liquid

In this report we will identify business risk that AT&T experienced due to their divestiture in 1982. We will conduct our analysis based on financial concepts, and finally recommend necessary actions that should have been conducted when the company formulated its financial policy in 1983.

(Compound value solving for I) at what annual rate would the following have to be investe