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    Asm Burraq
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    Midterms and finals will cover homework and reading assignments, focusing on key terms and financial statements. Comparative analysis uses common size statements and financial ratios, such as those found in Table 3.8, to compare performance across companies of different sizes. The lecture discusses short-term solvency ratios that measure liquidity, why financial ratios are examined, and how the dividend payout ratio, retention ratio, and internal and sustainable growth rates are calculated from net income and dividends. Students are asked to bring a financial calculator to the next class.

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    Midterms and finals will cover homework and reading assignments, focusing on key terms and financial statements. Comparative analysis uses common size statements and financial ratios, such as those found in Table 3.8, to compare performance across companies of different sizes. The lecture discusses short-term solvency ratios that measure liquidity, why financial ratios are examined, and how the dividend payout ratio, retention ratio, and internal and sustainable growth rates are calculated from net income and dividends. Students are asked to bring a financial calculator to the next class.

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    7 views1 page

    Lecture 2

    Uploaded by

    Asm Burraq
    Midterms and finals will cover homework and reading assignments, focusing on key terms and financial statements. Comparative analysis uses common size statements and financial ratios, such as those found in Table 3.8, to compare performance across companies of different sizes. The lecture discusses short-term solvency ratios that measure liquidity, why financial ratios are examined, and how the dividend payout ratio, retention ratio, and internal and sustainable growth rates are calculated from net income and dividends. Students are asked to bring a financial calculator to the next class.

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    © All Rights Reserved
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    Lecture 2

    Midterms and Finals based on homework assignments, and reading


    assignments, esp. bold faces and exhibits.
    Standardized financial statements useful for comparing different
    size companies
    Comparative Analysis- Common Size Statements
    RatiosCommon Financial Ratios Table 3.8 pp. 67 Textbook.

    Asthenamesuggests,shorttermsolvencyratiosasagroupareintendedto
    provideinformationaboutafirmsliquidity,andtheseratiosaresometimes
    calledliquiditymeasures.
    Why do we look at ratios? Quick Ratio, Total Debt ratio (Long term
    solvency)
    Bring Financial Calculator next week.
    Financial Planning
    External Financing Needed = EFN
    Dividend Payout Ratio- how much dividend you pay out.how much
    you give out to investors.
    1)Addiotn to adition to retained earning = Net income Divednds.
    2)b= Retention or plow back ratio
    3)1-b = Dividend Payout Ratio
    Internal Growth rate = RoA x b /11- RoA xb
    Sustainable Growth Rate = RoE x b /1-RoEx b
    Chapter 4 Problem 4, pp. 116
    Next week Chapter 5, 6.

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