Financial Statement Analysis Sample Exam

3. Using the cash flow indicator and investment valuation ratios, discuss which company is more likely to have satisfied stockholders.

Wells Fargo shows a much higher profitability ratio than Samsung, with over 8X that of Samsung. This is to be expected as services are typically more profitable than hardware sales which operate on leaner margins. Wells Fargo also outperforms Samsung significantly on return on sales with over 25X better performance. This again is attributable to better margins on services than hardware. Wells Fargo has a much stronger return on equity than Samsung with a Dupont ratio over 5X higher than Samsung's. Samsung has a stronger financial leverage ratio than Wells Fargo with almost 20% lower ratio for Samsung. Samsung also has a much lower total asset turnover than Wells Fargo. This is attributable to the quick turnover of assets in the manufacturing industry compared to the slow turnover of assets in the financial services sector.

4. The case indicates that the company’s “market value” of equity at June 30, 1999 was $460 billion. Compare this to the company’s “book value” of equity. What factors likely explain the difference between these two values?

|Q| In the surgical care unit, the nurse is attending the needs of the client who has Kock pouch for urinary diversion. Which one of the following nursing interventions is most effective in decreasing the likelihood of urinary tract infection of the client?

Market value per share = Book value per share = $12,000 / 750 shares = $16 per share

Issued a credit to a customer for the return of a bike. The bike was returned to inventory.

What is the firm value, assuming no growth opportunities? What is the present value of the firm’s growth opportunities? The risk free rate of return on Treasury bills is 4.8%. The market risk premium is 6% and Innovation’s share beta is 1.2. b) Calculate Innovation’s price-earnings ratio and the price-book ratio (i.e. the ratio of the market value to book value) as of 31 December 2002. c) What are the advantages and disadvantages of each of the three valuation methods used in (a), and (b)? d) State whether Innovation’s share is overvalued or undervalued as of 31 December 2002. Support your conclusion using your answers to previous questions and any data provided. The past 10-year average FTSE All Share index relative price-earnings and price-book ratios for Innovation were 0.4 and 1.12, respectively.

Last year, T-bills returned 2 percent while your investment in large-company stocks earned an average of 5 percent. Which one of the following terms refers to the difference between these two rates of return? A. risk premium B. geometric return C. arithmetic D. standard deviation E. variance

INDIVIDUAL ASSIGNMENT FIN202 | | TOPIC: Financial statement analysis and stock valuationLECTURE: PHAM LIEN HASTUDENT: HOANG MY LINH ROLL NUMBER: FB00073 CLASS: FB0609 - FPT University | | Contents I. INTRODUCTION 2 1. Main production 2 2. Segment market 2 3. Vision 2 4.

Obtaining financing is one of the challenges facing a new venture. The financial planning and good budgeting will be significant factors in helping Portions Restaurant reach success. The restaurants financial statement analysis below lists the sources of funding, the capital structure, debt to equity ratios, the intentions of going public and a break even analysis.

This paper describes a financial statement analysis project useful in both preparerbased and user-based introductory courses in financial accounting. The project

7.5 – 9.75 marks: The paper does not have excessive grammatical or other writing errors. The report addresses the issues specified in the requirements but demonstrates only minimal understanding of one or more of the issues.

Comparing all the companies we have here, we know the sector value is 6.15, and we can see that Costco is has the largest number with 28.59, meaning that this company has big growth, and it is not risky. Along the other companies, we know that Target, Walmart, and Home Depot are doing well too. In this same case Nordstrom and Macy’s are not doing so well, they are a little below average, so we can conclude they are not growing that fast, and they are tending to become a little risky.

55. Does the statement of cash flows or an income statement best measure the profitability of a financially sound business? Explain.

The conservative desire by many is for no capitalisation of any element of R&D expenditure but rather the immediate expensing. This is believed to provide a clearer and more useful report on the operations of the company in addition to reinsuring consistency in comparability and practice among companies (Gornik-Tomaszewski & Millan, 2005).