I am doing Balance sheet analysis,
I don't how to analyze it.
Now I am just writing explanation about each item and % of increase or decrease compared to last year (2005).
If you have a hint, could you tell me?
2007-10-24 15:01:06 · 3 answers · asked by Anonymous in Business & Finance ➔ Other - Business & Finance
That is a good start. Try searching the Internet on: quick ratio and current ratio.
How about debt to equity? Divide the total liabilities by owner's equity to see how that has changed between the two years.
If the fixed asset balance has increased from year one to year two, you would expect the depreciation expense would have also increased (and the other way around). If not then perhaps the company changed their method of depreciation.
Does this balance sheet come with any notes to the financial statements? The answers should be in there. It sounds like you are having to write the notes, in effect.
If this is a manufacturing business how has cost of goods sold changed from year to year?
Good luck!
2007-10-24 15:23:57 · answer #1 · answered by dazed&confused 3 · 0⤊ 0⤋
Analysis of a Company by its Balance Sheet is mainly based upon its Profit and Loss Account.
2016-05-25 16:18:51 · answer #2 · answered by felipa 3 · 0⤊ 0⤋
Here are some sites on ratio analysis and what the ratios actually mean.
2007-10-25 03:47:38 · answer #3 · answered by Sandy 7 · 0⤊ 0⤋