1
Cash flow statement It is a statement that shows all the outflows incurred by a company in cash and all the inflows of cash. This statement is divided into three sections or it shows cash flows under three activities namely, investing activities, financing activities and operating activities. To prepare: A cash flow statement by using the indirect method.
2
To calculate:Amount of free cash flow.
3
To calculate:Current ratio and quick (acid-test) ratio for the company.
4
Asset management
Asset management means proper management of investments made by a company. Asset management is done to maximize the
To calculate:Average collection and average sales period in order to assist the asset management of the company.
5
Debt management Debt management means proper management of the amount that a company owes to others. It specifies the total amount that a company owes to its creditors.
To calculate:Debt to equity ratio and equity multiplier in order to assist the debt management of the company.
6
Profitability ratios These ratios calculate the ability of a company to make a profit related to its total assets, liabilities, expenses and sales made.
To calculate:Net profit margin and return on equity of the company in order to asses its profitability.
7
Assessment of market performance This requires the calculation of overall performance of the company in the market, earnings earned by the company, amount of dividend paid, etc.
To calculate:Earning per share and dividend payout ratio of the company in order to assess its market performance.
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