Accounting Ratios
for Financial Statement Analysis
| Liquidity Analysis Ratios |
 Current Ratio |
| Current Assets | ||
| Current Ratio = | ------------------------ | |
| Current Liabilities | ||
| Quick Ratio |
| Quick Assets | ||
| Quick Ratio = | ---------------------- | |
| Current Liabilities | ||
| Quick Assets = Current Assets - Inventories |
| Net Working Capital Ratio |
| Net Working Capital | ||
| Net Working Capital Ratio = | -------------------------- | |
| Total Assets | ||
| Net Working Capital = Current Assets - Current Liabilities |
| Profitability Analysis Ratios |
| Return on Assets (ROA) |
| Net Income | ||
| Return on Assets (ROA) = | ---------------------------------- | |
| Average Total Assets | ||
| Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2 |
| Return on Equity (ROE) |
| Net Income | ||
| Return on Equity (ROE) = | ---------------------------------------- | |
| Average Stockholders' Equity | ||
| Average Stockholders' Equity = (Beginning Stockholders' Equity + Ending Stockholders' Equity) / 2 |
| Return on Common Equity (ROCE) |
| Net Income | ||
| Return on Common Equity (ROCE) = | ---------------------------------------- | |
| Average Common Stockholders' Equity | ||
| Average Common Stockholders' Equity = (Beginning Common Stockholders' Equity + Ending Common Stockholders' Equity) / 2 |
| Profit Margin |
| Net Income | ||
| Profit Margin = | ----------------- | |
| Sales | ||
| Earnings Per Share (EPS) |
| Net Income | ||
| Earnings Per Share (EPS) = | ---------------------------------------- | |
| Number of Common Shares Outstanding | ||
| Activity Analysis Ratios |
| Assets Turnover Ratio |
| Sales | ||
| Assets Turnover Ratio = | ---------------------------- | |
| Average Total Assets | ||
| Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2 |
| Accounts Receivable Turnover Ratio |
| Sales | ||
| Accounts Receivable Turnover Ratio = | ----------------------------------- | |
| Average Accounts Receivable | ||
| Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2 |
| Inventory Turnover Ratio |
| Cost of Goods Sold | ||
| Inventory Turnover Ratio = | --------------------------- | |
| Average Inventories | ||
| Average Inventories = (Beginning Inventories + Ending Inventories) / 2 |
| Capital Structure Analysis Ratios |
| Debt to Equity Ratio |
| Total Liabilities | ||
| Debt to Equity Ratio = | ---------------------------------- | |
| Total Stockholders' Equity | ||
| Interest Coverage Ratio |
| Income Before Interest and Income Tax Expenses | ||
| Interest Coverage Ratio = | ---------------------------------------- | |
| Interest Expense | ||
| Income Before Interest and Income Tax Expenses = Income Before Income Taxes + Interest Expense |
| Capital Market Analysis Ratios |
| Price Earnings (PE) Ratio |
| Market Price of Common Stock Per Share | ||
| Price Earnings (PE) Ratio = | ---------------------------------------- | |
| Earnings Per Share | ||
| Market to Book Ratio |
| Market Price of Common Stock Per Share | ||
| Market to Book Ratio = | ---------------------------------------- | |
| Book Value of Equity Per Common Share | ||
| Book Value of Equity Per Common Share = Book Value of Equity for Common Stock / Number of Common Shares |
| Dividend Yield |
| Annual Dividends Per Common Share | ||
| Dividend Yield = | ---------------------------------------- | |
| Market Price of Common Stock Per Share | ||
| Book Value of Equity Per Common Share = Book Value of Equity for Common Stock / Number of Common Shares |
| Dividend Payout Ratio |
| Cash Dividends | ||
| Dividend Payout Ratio = | -------------------- | |
| Net Income | ||
| ROA = Profit Margin X Assets Turnover Ratio |
| ROA = Profit Margin X Assets Turnover Ratio |
| Net Income | Net Income | Sales | ||
| ROA = | ------------------------ = | -------------- X | ------------------------ | |
| Average Total Assets | Sales | Average Total Assets | ||
| Profit Margin = Net Income / Sales Assets Turnover Ratio = Sales / Averages Total Assets |
- Mood:
awake
Warm Vegetable Salad with Carrot and Ginger Vinaigrette
Dressing
3 cups olive oil
1 cup white wine vinegar
1 bay leaf
1 spring thyme
1 spring rosemary
1 clove garlic, lightly crushed
1 tbsp white peppercorn
1 tbsp coriander seeds
3 star anise
Place all the ingredients into a pan and heat gently for 15 minutes. Leave to infuse until at room
Temperature (approximately 1 hour). Refrigerate if necessary.
Check seasoning.
Salad
3 baby carrots, peeled
1 cup cauliflowers florets
6 pearl onions, peeled
2 artichokes, peeled, cooked and cut into wedges
5 baby leeks, trimmed and cut in half
4 ribs Celery, peeled and cut into wedges
Salad greens, garnish
Prepare all the vegetables and blanch each one until just cooked. Warm the dressing again and marinade the vegetables.
Carrot and ginger vinaigrette, garnish
1 cup + 1 tbsp olive oil
2 tbsp White Wine vinegar
Salt and papper
3 carrots, peeled and finely chopped
1 oz ginger, finely chopped
Water as needed
Mix 1 cup of the oil with the white wine vinegar to form a basic vinaigrette. Add salt and pepper to taste.
Roasted Tomato Soup
Serves 4
4 tbsp olive oil
10 plum tomateos, halves
1 white onion, thinly sliced
2 garlic cloves, halved
2 thyme springs
1 tsp white sugar
2 bunches of basil
1 quart chicken or vegetable stock
Salt and freshly ground black pepper
To serve
2 tbsp olive oil
4 small clusters of cherry tomatoes on the vine
4 basil leaves, thinly sliced
Combine the tomatoes, onion and garlic in a mixing bowl and season with olive oil, salt and pepper. Lay out on a baking tray and sprinkle with thyme, basil and sugar. Roast in the oven at 425 degrees until caramelized.
Pour the tomatoes into a blender and puree. While the blender in running, ladle in hot stock to smooth the soup. You may not use all of the stock.
For garnish, heat olive oil, lightly sauté the tomato clusters on the vine. Serve on top of the soup with thin sliced basil.
Swear the carrots and ginger in the remaining olive oil until completely soft but with no color. Add enough water to cover and simmer for 5 mins. Puree in a blender and strain through a fine sieve. Add more water if too sick. Season and mix with a small amount of vinaigrette to form a smoth pouring puree.
To serve, arrange the vegetable in the center of the plate and finish with salad greens and drizzle with the carrot and ginger vinaigrette as well as the dressing.
- Mood:
artistic
The OU Business School enables you to combine your studies with your professional and private lives. You can study without taking time out from the workplace – a benefit that is of value both to you and your employer. Your studies need not be disrupted by travel, by relocation or by changing personal circumstances and you can continue earning whilst you are learning.
Our courses blend academic rigour with management practice and are relevant to the everyday roles of managers. Newly acquired skills are immediately transferable. Our course materials incorporate the latest management thinking, derived from ongoing research with business and academic partners worldwide. The School has a significant and wide ranging research capability that places it in the major league of European business schools
MBA
Master of Business Administration
(MBA)
An MBA is a global recognition of your management excellence. It's a milestone in the career of any business professional and is a sure way to enhance your salary and promotion prospects.
The OU Business School MBA emphasises strategic analysis, interdisciplinary skills and independent judgement. The programme is studied in the English language.
All courses assume an understanding of fundamental management principles and business strategy and draw on your past management experience and current work environment.
Earn as you learn
Taking time out to study full time can be costly and can disrupt your career. With the OU Business School, you can fit your studies around your professional and private life and can continue working and earning while studying for your MBA.
Career relevance
Management skills developed during your MBA can be put into practice immediately in your own work environment. This brings benefits to both you and your employer.
A network of support
You will be supported by a personal tutor and be part of a tutorial group of 10-20 students. You will have the opportunity to network with managers from different organisations and countries at workshops and short residential seminars, as well as through a range of computer based conferences.
Routes to the MBA
There are different routes to the MBA depending on your educational qualifications and your organisational experience. The programme starts twice a year and can be completed in 2 1/2 years.
More about planning your studies for:
2. University of Phoenix
Real World Higher Education that Works for You.
The University's educational philosophy and operating structure embody participative, collaborative, and applied problem solving strategies. This approach is facilitated by a practitioner MBA faculty whose advanced academic preparation and professional experience help integrate academic theory with application of current 'best practice' management methodologies.
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MBA: Specialization offered at University of Phoenix:
Download full MBA specialization descriptions here >>
- Accounting
- Global Management
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- Human Resources Management
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Resource - online MBA course materials
University of Phoenix supports problem-based learning through Resource. Resource gives users the ability to find and use learning assets such as Virtual Organizations.
These are data storehouses waiting to be mined. Students search Resource after they determine a need for a balance sheet or perhaps the latest market research. Through a rigorous investigational process, that involves understanding what they don’t know, students determine what information is required.
University of Phoenix : FlexNet®
The University of Phoenix FlexNet combines the in-person interaction of the campus classroom with the flexibility of online-learning. It helps you to complete the MBA program and advance your career while balancing the demands of work, family, and education.
It works like this: You meet in the classroom for key coursework and team interaction. The rest of the time, you interact with faculty and fellow students through our online environment.
3. University of Liverpool
s a member of the Russell Group of leading research universities – the 'Ivy League' of UK higher education – the University of Liverpool is at the forefront of academic provision.
Founded in 1881, with the establishment of University College Liverpool, the University of Liverpool was one of the first civic universities. In fact, Liverpool is the original redbrick university; the term 'redbrick' comes from the distinctive appearance of the Victoria Building, which was built in 1892.
• Read more about History of the University of Liverpool
• Find out about 8 of the UK's Nobel Laureates who were based at the University of Liverpool at a significant point in their career
Outstanding reputation
The Financial Times has ranked the University of Liverpool among the top 10 UK universities in terms of annual research income; and it is the 15th largest research university in the UK. The University is also one of the top 25 universities in England according to the latest Times Higher Education Supplement University World Rankings.
No fewer than eight Nobel Prizes have been won by members of its academic staff.
Pioneering approach
The University has always encouraged innovation in learning and has been a catalyst for pioneering educational programmes, such as its unique partnership with Laureate Online Education.
Master of Business Administration - MBA
By the end of the programme, you will understand how marketing can help you identify, analyse and exploit world markets and have an appreciation of the management processes involved in making major strategic decisions. Your understanding of the latest theories and best practices in people management will include a firm grounding in psychology and an awareness of how human behaviour affects leadership. In addition, your new portfolio of analytical and strategic skills will help you better implement informed management decisions.
| Master of Science in Operations and Supply Chain Management- MSc in OSCM |
| Master of Science in IT - MSc in IT |
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By the end of the programme you will have acquired the specialised skills and knowledge needed to pursue a new career in clinical research administration – or broaden an existing one. A highly interactive approach will give you the tools you need to plan, coordinate and conduct a complete clinical trial, from pre-study to close-out. Your enhanced skills in communication, teamwork, information technology and statistics will further prepare you for a professional role in the biomedical and biopharmaceutical research sectors.
- Mood:
accomplished
| Wine 1 - X1 | Wine 2 - X2 | Wine 3 - X3 | |
| Grapes A | 4 | 0 | 2 |
| Grapes B | 0 | 4 | 2 |
| Sugar | 1 | 0 | 2 |
| Labour | 3 | 1 | 2 |
| Profit per unit | 24 | 28 | 20 |
| Maximize profit= 24X1+28X2+20X3 | |||
| First constrain | 4X1+0X2+2X3=2800 | ||
| Second constrain | 0X1+4X2+2X3=2040 | ||
| Third Constrain | 1X1+0X2+2X3=800 | ||
| Forth Constrain | 3X1+1X2+2X3=1060 | ||
программку под названием POM я одалела с первой попытки:)) И даже подсчитала результаты правильно.
Кому интересно вот ссылка на программу (она бесплатная)
Проблема была следующая:
Lost Maples Winery makes three varieties of contemporary Texas Hill County wines: Austin (a fine red), St. Genevieve (a table white) and Los Almos (a pink Zinfandel).
The raw materials plus labour requirements and unit contributions per case, for each of these three wines are shown in the table below.
| Per Case | Grapes: Variety A bushels | Grapes: Variety B bushels | Pounds of sugar | Labour man-hours | Contribution per case $ |
| Austin | 4 | 0 | 1 | 3 | 24 |
| St Genevieve | 0 | 4 | 0 | 1 | 28 |
| Los Almos | 2 | 2 | 2 | 2 | 20 |
The winery has 2,800 bushels of Variety A grapes, 2040 bushels of Variety B grapes, 800 pounds of sugar and 1,060 man-hours of labour available during the next week. Its owners wish to maximise their contribution and have asked you to advise them as to how to achieve this.
REQUIRED:
a) Based upon the above data, formulate the information provided as a Linear Programming problem.
b) Solve the problem by computer.
c) Write a Business Report for the managers of Lost Maples Winery, explaining what you have done and the meaning of your calculations and results. You should assume that your Report’s audience have never heard of Linear Programming before.
d) In your Report, include details of the following:
Ø How much of each wine should be produced to maximise contribution?
Ø How much contribution will be made by selling the optimal output?
Ø Is there any sugar left over? If so, how much is left? If not, what is its shadow price (dual value) and what does this mean? Explain the ‘complementary slackness’ condition, using the LP results generated for sugar.
Ø Interpret the meaning of the lower bound to Labour in your ranging analysis; that is, how would your solution change if the amount of labour fell below that lower value?
Ø Explain the meaning of the upper bound for Los Almos wine in your ranging analysis?
e) Also discuss any limitations of your analysis, plus any further factors that the winery owners should consider, in determining their optimal future production strategy.
ответы в слудующем посте:)))
Volume 1 - Chapter 1
1.
| Assets | Liabilities | Capital |
| 26,500 | 3,670 | 22,830 |
| 14,333 | 4,828 | 9,505 |
| 17,150 | 4,490 | 12,660 |
| 54,337 | 15,347 | 38,990 |
| 29,001 | 1,446 | 27,555 |
| 9,560 | 58 | 9,502 |
2.
Assets Liabilities
Fixtures and fittings What we owe our bank
Cash in till Trade creditors
Motor car Stocks of goods
3.
K Webb
Balance Sheet as at 31 March 20X7
| | £ | £ |
| Assets | | |
| Premises | 26,800 | |
| Equipment | 2,800 | |
| Stocks | 450 | |
| Debtors | 420 | |
| Cash at bank | 240 | 30,710 |
| Less Liabilities | | |
| Bank loan | 15,000 | |
| Creditors | 160 | 15,160 |
| | | |
| Capital | | 15,550 |
4.
| | Assets | Liabilities | Capital |
| | £ | £ | £ |
| (a) | 1,143 | 564 | 579 |
| (b) | 32,552 | 7,868 | 24,684 |
| (c) | 174,234 | 43,244 | 130,990 |
| (d) | 56,826 | 42,314 | 14,512 |
| (e) | 98,693 | 21,414 | 77,279 |
| (f) | 77,657 | 55,464 | 22,193 |
5. The following were under the wrong headings:
· Amounts due on stocks purchased
· Loan made by the firm to another firm
· Bank overdraft
· Amounts owing to firm by debtors overdraft
- Mood:
cheerful
Chapter 1: The accounting equation and the balance sheet
After you have studied this chapter, you should be able to:
- explain what accounting is about
- briefly describe the history of accounting
- explain the relationship between bookkeeping and accounting
- list the main users of accounting information and what accounting information they are interested in
- present and explain the accounting equation
- explain the relationship between the accounting equation and the layout of the balance sheet
- explain the meaning of the terms assets, capital, liabilities, debtors, and creditors
- describe how accounting transactions affect the items in the accounting equation
- draw up balance sheets after different accounting transactions have occurred
Review Questions
Volume 1 - Chapter 1
1. Complete the gaps in the following table: | | Assets | Liabilities | Capital |
| | £ | £ | £ |
| (a) | 26,500 | 3,670 | ? |
| (b) | 14,333 | ? | 9,505 |
| (c) | ? | 4,490 | 12,660 |
| (d) | 54,337 | ? | 38,990 |
| (e) | 29,001 | ? | 27,555 |
| (f) | 9,560 | 58 | ? |
2. Classify the following items into assets and liabilities:
(a) Fixtures and fittings
(b) What we owe our bank
(c) Trade creditors
(d) Cash in till
(e) Motor car
(f) Stocks of goods
3. Draw up the balance sheet for K Webb from the following information as at 31 March 20X7.
| | £ |
| Capital | 15,550 |
| Premises | 26,800 |
| Bank loan | 15,000 |
| Stock of goods | 450 |
| Cash at bank | 240 |
| Creditors | 160 |
| Equipment | 2,800 |
| Debtors | 420 |
4. Complete the gaps in the following table:
| | Assets | Liabilities | Capital |
| | £ | £ | £ |
| (a) | 1,143 | 564 | ? |
| (b) | ? | 7,868 | 24,684 |
| (c) | ? | 43,244 | 130,990 |
| (d) | 56,826 | ? | 14,512 |
| (e) | 98,693 | 21,414 | ? |
| (f) | 77,657 | ? | 22,193 |
5. Which of the following are shown under the wrong headings?
| Assets | Liabilities |
| Stocks of goods for resale | Cash in till |
| Amounts due on stocks purchased | Amounts owing to firm by debtors |
| Loan made by the firm to another firm | Mortgage |
| Bank overdraft | |
| Machinery | |
- Mood: busy
Frank Wood's Business Accounting Volume 1
11th Edition
Frank Wood, Alan Sangster
Apr 2008, Paperback, 792 pagesISBN13: 9780273712121
ISBN10: 0273712128
Very interesting and easy to understand book, with exercises, and special site for extra exercises and glossary
Here are my results for the first multipal questions task....
I must say I did not do so good :-))
| Summary of Results | ||||
54% Correct of 28 items:
| ||||
54% 
46% - Mood: accomplished
- Mood:
cranky
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