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Financial Statement Analysis
Financial statement analysis (or just financial analysis) is the process of reviewing and analyzing a company's financial statements to make better economic decisions to earn income in future. These statements include the income statement, balance sheet, statement of cash flows, notes to accounts and a statement of changes in equity (if applicable). Financial statement analysis is a method or process involving specific techniques for evaluating risks, performance, valuation, financial health, and future prospects of an organization. It is used by a variety of stakeholders, such as credit and equity investors, the government, the public, and decision-makers within the organization. These stakeholders have different interests and apply a variety of different techniques to meet their needs. For example, equity investors are interested in the long-term earnings power of the organization and perhaps the sustainability and growth of dividend payments. Creditors want to ensure the int ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Fundamental Analysis
Fundamental analysis, in accounting and finance, is the analysis of a business's financial statements (usually to analyze the business's assets, Liability (financial accounting), liabilities, and earnings); health; Competition, competitors and Market (economics), markets. It also considers the overall state of the economy and factors including interest rates, production, earnings, employment, GDP, housing, manufacturing and management. There are two basic approaches that can be used: bottom up analysis and top down analysis. These terms are used to distinguish such analysis from other types of investment analysis, such as technical analysis. Fundamental analysis is performed on historical and present data, but with the goal of making financial forecasts. There are several possible objectives: * to conduct a company stock valuation and predict its probable price evolution; * to make a projection on its business performance; * to evaluate its management and make internal business d ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Financial Statement
Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to understand. They typically include four basic financial statements accompanied by a management discussion and analysis: # A balance sheet reports on a company's assets, liabilities, and owners equity at a given point in time. # An income statement reports on a company's income, expenses, and profits over a stated period. A profit and loss statement provides information on the operation of the enterprise. These include sales and the various expenses incurred during the stated period. # A statement of changes in equity reports on the changes in equity of the company over a stated period. # A cash flow statement reports on a company's cash flow activities, particularly its operating, investing and financing activities over a stated pe ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Financial Audit
A financial audit is conducted to provide an opinion whether "financial statements" (the information is verified to the extent of reasonable assurance granted) are stated in accordance with specified criteria. Normally, the criteria are international accounting standards, although auditors may conduct audits of financial statements prepared using the cash basis or some other basis of accounting appropriate for the organization. In providing an opinion whether financial statements are fairly stated in accordance with accounting standards, the auditor gathers evidence to determine whether the statements contain material errors or other misstatements.Arens, Elder, Beasley; Auditing and Assurance Services; 14th Edition; Prentice Hall; 2012 Overview The audit opinion is intended to provide reasonable assurance, but not absolute assurance, that the financial statements are presented fairly, in all material respects, and/or give a true and fair view in accordance with the financial rep ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Business Valuation
Business valuation is a process and a set of procedures used to estimate the economic value of an owner's interest in a business. Here various valuation techniques are used by financial market participants to determine the price they are willing to pay or receive to effect a sale of the business. In addition to estimating the selling price of a business, the same valuation tools are often used by business appraisers to resolve disputes related to estate and gift taxation, divorce litigation, allocate business purchase price among business assets, establish a formula for estimating the value of partners' ownership interest for buy-sell agreements, and many other business and legal purposes such as in shareholders deadlock, divorce litigation and estate contest. Specialized business valuation credentials include the Chartered Business Valuator (CBV) offered by the CBV Institute, ASA and CEIV from the American Society of Appraisers, and the Certified Valuation Analyst (CVA) by the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Rate Of Profit
In economics and finance, the profit rate is the relative profitability of an investment project, a capitalist enterprise or a whole capitalist economy. It is similar to the concept of rate of return on investment. Historical cost ''vs.'' market value The rate of profit depends on the definition of ''capital invested''. Two measurements of the value of capital exist: capital at historical cost and capital at market value. Historical cost is the original cost of an asset at the time of purchase or payment. Market value is the re-sale value, replacement value, or value in present or alternative use. To compute the rate of profit, replacement cost of capital assets must be used to define the capital cost. Assets such as machinery cannot be replaced at their historical cost, but must be purchased at the current market value. When inflation occurs, historical cost would not take account of rising prices of equipment. The rate of profit would be overestimated, using lower historic ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Accounting Software
Accounting software is a computer program that maintains accounting, account books on computers, including recording Financial transaction, transactions and Balance (accounting), account balances. It may depend on virtual thinking. Depending on the purpose, the software can manage budgets, perform accounting tasks for multiple currencies, perform payroll and customer relationship management, and prepare financial reporting. Work to have accounting functions be implemented on computers goes back to the earliest days of electronic data processing. Over time, accounting software has revolutionized from supporting basic accounting operations to performing real-time accounting and supporting financial processing and reporting. Cloud accounting software was first introduced in 2011, and it allowed the performance of all accounting functions through the internet. Modules Accounting software is typically composed of various modules, with different sections dealing with particular areas ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Spreadsheet
A spreadsheet is a computer application for computation, organization, analysis and storage of data in tabular form. Spreadsheets were developed as computerized analogs of paper accounting worksheets. The program operates on data entered in cells of a table. Each cell may contain either numeric or text data, or the results of formulas that automatically calculate and display a value based on the contents of other cells. The term ''spreadsheet'' may also refer to one such electronic document. Spreadsheet users can adjust any stored value and observe the effects on calculated values. This makes the spreadsheet useful for "what-if" analysis since many cases can be rapidly investigated without manual recalculation. Modern spreadsheet software can have multiple interacting sheets and can display data either as text and numerals or in graphical form. Besides performing basic arithmetic and mathematical functions, modern spreadsheets provide built-in functions for common financial ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Dividends
A dividend is a distribution of profits by a corporation to its shareholders, after which the stock exchange decreases the price of the stock by the dividend to remove volatility. The market has no control over the stock price on open on the ex-dividend date, though more often than not it may open higher. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-invested in the business (called retained earnings). The current year profit as well as the retained earnings of previous years are available for distribution; a corporation is usually prohibited from paying a dividend out of its capital. Distribution to shareholders may be in cash (usually by bank transfer) or, if the corporation has a dividend reinvestment plan, the amount can be paid by the issue of further shares or by share repurchase. In some cases, the distribution may be of assets. The dividend received by ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Net Present Value
The net present value (NPV) or net present worth (NPW) is a way of measuring the value of an asset that has cashflow by adding up the present value of all the future cash flows that asset will generate. The present value of a cash flow depends on the interval of time between now and the cash flow because of the Time value of money (which includes the annual effective discount rate). It provides a method for evaluating and comparing capital projects or financial products with cash flows spread over time, as in loans, investments, payouts from insurance contracts plus many other applications. Time value of money dictates that time affects the value of cash flows. For example, a lender may offer 99 cents for the promise of receiving $1.00 a month from now, but the promise to receive that same dollar 20 years in the future would be worth much less today to that same person (lender), even if the payback in both cases was equally certain. This decrease in the current value of future c ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Share Capital
A corporation's share capital, commonly referred to as capital stock in the United States, is the portion of a corporation's equity that has been derived by the issue of shares in the corporation to a shareholder, usually for cash. ''Share capital'' may also denote the number and types of shares that compose a corporation's share structure. Definition In accounting, the share capital of a corporation is the nominal value of issued shares (that is, the sum of their par values, sometimes indicated on share certificates). If the allocation price of shares is greater than the par value, as in a rights issue, the shares are said to be sold at a premium (variously called share premium, additional paid-in capital or paid-in capital in excess of par). This equation shows the constituents that make up a company's real share capital: : \sum\text \times \text This is differentiated from share capital in the accounting sense, as it presents nominal share capital and does not take t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Dividend Discount Model
In financial economics, the dividend discount model (DDM) is a method of valuing the price of a company's capital stock or business value based on the assertion that intrinsic value is determined by the sum of future cash flows from dividend payments to shareholders, discounted back to their present value. The constant-growth form of the DDM is sometimes referred to as the Gordon growth model (GGM), after Myron J. Gordon of the Massachusetts Institute of Technology, the University of Rochester, and the University of Toronto, who published it along with Eli Shapiro in 1956 and made reference to it in 1959. Their work borrowed heavily from the theoretical and mathematical ideas found in John Burr Williams 1938 book "The Theory of Investment Value," which put forth the dividend discount model 18 years before Gordon and Shapiro. When dividends are assumed to grow at a constant rate, the variables are: P is the current stock price. g is the constant growth rate in perpetuity expecte ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
