Financial Statement Analysis

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Financial Statement Analysis April Cruz, Litesha Forbes, Phillip Gibson, Jessica Hewlett, Lily James, Velda Justin, and Nzingha Reel ACC/561 September 27, 2010 Mark Tischler Financial Statement Analysis The accounting information of this paper provides a financial statement analysis for three distinct companies: Mercedes Benz, a foreign manufacturer of vehicles; Macy’s Inc, a retail department store, and American Airlines, an airline company. The analysis for each company includes the quick and current liquidity ratios, the DuPont ratio, profit margin, asset utilization, and financial leverage. Discussions in this paper include how the differences of each industry affect presentations as they relate to different…show more content…
The IASB sets international principles underlying the preparation of financial statements. It represents the foundation of international accounting (IASB, 2010). The FASB is a private board that sets the standards for the United States. The FASB makes sure standards make information accessible and understandable for the public and investors in the U.S. They define fair values and framework for fair values in (GAAP) Generally Accepted Accounting Principles (FASB, 2010). The two boards are working on joining to form one common set of standards that will rule internationally. The merger is not formally completed but they are already working together to create new rules that affect presentations across-the-board, i.e. according to The Economist (2010), “businesses may have to start putting leases on their balance-sheets” (Business & Finance, para 1). This is an example of an across-the-board rule that would affect any industry that leases equipment, property, or any item, and they must record it to their liabilities column. Mercedes Benz currently follows the standards of International Financial Reporting Standards (IFRS) because it is a foreign owned company. These standards are more principle-based and require more judgment than American accountants are use to in their accounting procedures. The retail industry’s current IFRS application practice is diversified (IFRS, 2010). Retailers in the industry follow IASB and FASB guidelines that cause
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