FINANCIAL & MANAGERIAL

ACCOUNTING

PRESENTED BY
EI EI KYAW MYINT

July 23, 2023

Advantages of Incorporation
Disadvantages of Incorporation
Rights of Stockholders
Corporate Organization Chart
Different Rules for Public Owned
Corporation
Authorization and issuance of
Capital Stock
Authorization and issuance of
Capital Stock
Financial Analysis and Decision Making
 Financial Analysis and Decision Making

Analyzing financial statements involves:

Comparison Tools of
Characteristics
Bases Analysis

 Liquidity  Intracompany  Horizontal

 Profitability  Industry - Dollar &Percentage
 Solvency averages - Trend
 Intercompany - Component
 Vertical
 Ratio
 Horizontal Analysis

Horizontal analysis is a technique for evaluating a series of financial statement data

over a period of time. Purpose is to determine the increase or decrease. It consists of:
 Dollar &Percentage changes
 Trend changes
 Component changes
 Commonly applied to the
► balance sheet,
► income statement, and
► statement of retained earnings.
Horizontal Analysis
Dollar or Percentage Changes
Dollar or Percentage Changes
Dollar or Percentage Changes
Evaluating Percentage Changes in Sales
and Earnings
Trend Percentage
Trend Percentage
Component Percentage
Component Percentage
Quality of Assets and Relative
Amount of Debts
 Analyzing Company’s
Performance

Measures short-term ability of the company to pay its

Liquidity
maturing obligations and to meet unexpected needs for cash.

Measures the income or operating success of a company for

Profitability
a given period of time.

Measures the ability of the company to survive over a long

Solvency period of time.
Liquidity

Measures short-term ability of the company to pay its maturing

obligations and to meet unexpected needs for cash.

 Short-term creditors such as bankers and suppliers are

particularly interested in assessing liquidity.
 Ratios include the current ratio, the acid-test ratio, accounts
receivable turnover, and inventory turnover.
 Profitability

Measures the income or operating success of a company for a given

period of time.

 Income affects the company’s ability to obtain debt and equity

financing, their liquidity position, and their ability to grow.
 Ratios include the profit margin, asset turnover, return on assets,
return on common stockholders’ equity, earnings per share, price-
earnings ratio, and payout ratio.
Solvency

Measures the ability of the company to survive over a long

period of time and provide information about debt-paying
ability. It contains
 Debt to Assets and
 Times Interest Earned
Ratios
Working Capital
Current Ratio
Quick Ratio
Debt Ratio
Uses and Limitations of Financial
Ratios
Measure of Profitability
Earning Per Share
Price Earning Ratio
Return On Investment (ROI)
Return On Assets (ROA)
 Return On Equity (ROE)

E
Dividend Yield Ratio
Interest Coverage Ratio
Debt Ratio
Accountable Receivable Turnover
Inventory Turnover Rate