Financial Statement Analysis Essay

2546 Words Jan 9th, 2013 11 Pages
For the exclusive use of G. NEVIOUS

TB0069
August 9, 2007

Graeme Rankine

Financial Statement Analysis—
Identify the Industry
Since opportunities and constraints tend to be different across industries, companies in different industries tend to make different investment, dividend, and financing decisions. Thus, firms in different industries exhibit different financial characteristics, and, hence, report different financial ratios. For example, “old economy” businesses with large amounts of tangible assets may have higher leverage ratios. Service or trading firms may have large amounts of intangible assets such as knowledge assets or a large and loyal customer base, and, hence, have low leverage ratios because “growth options”
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Source: Thomson Banker One-Analytics

1
100.00
79.32
20.68
0.00
19.38
1.30
0.00
0.64
1.67
0.27
(0.09)
0.04
0.00
0.10
0.41
0.35
0.76

2
100.00
11.11
88.89
0.00
20.17
68.72
1.18
(19.23)
18.33
29.98
9.98
0.00
0.00
0.00
20.00
0.00
20.00

3
100.00
36.62
63.38
0.00
39.91
23.47
0.00
1.98
0.99
24.47
7.72
0.00
0.00
0.00
16.75
(1.85)
14.90

4
100.00
49.78
50.22
0.32
25.13
24.77
3.11
(5.09)
0.18
16.39
6.53
0.00
0.00
0.00
9.86
0.00
9.86

5
100.00
52.77
47.23
0.00
14.54
32.69
4.50
1.84
0.00
30.04
4.18
0.07
0.21
(0.21)
25.78
0.21
25.99

Common-Size Income Statement (percentage; averaged over three years)

NET SALES
COST OF GOODS
GROSS PROFIT
R & D EXPENDITURES
SELL GEN & ADMIN EXP
INC BEF DEP & AMORT
DEPRECIATION & AMORT
NON-OPERATING INC
INTEREST EXPENSE
INCOME BEFORE TAX
PROV FOR INC TAXES
MINORITY INT (INC)
INVEST GAINS/LOSSES
OTHER INCOME
NET INC BEF EX ITEMS
EX ITEMS & DISC OPS
NET INCOME

Exhibit 2
6
100.00
43.81
56.19
14.61
16.01
25.58
0.00
2.15
0.09
27.64
8.12
0.00
0.00
0.00
19.51
0.00
19.51

7
100.00
23.20
76.80
20.01
35.77
21.03
0.00
0.37
0.87
20.52
5.96
0.00
0.00
0.00
14.57
(0.05)
14.52

8
100.00
17.03
82.97
17.18
33.02
32.77
0.00
5.94
0.00
38.71
11.57
0.00
0.00
0.00
27.14
0.00

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