A. Defenision
Analysis Of Financial Reports
Analysis
of the financial statements is the method used to analyze the company's
financial position or performance in the future and compare financial
performance between companies in the same industry as well as evaluate the
tendency of company operations during some periods.
Analysis
of financial reports to help management identify the deficiency (in-efficiency)
in the company and take action to improve the performance of the company.
Business analysis is the analysis of the financial statements is useful in
business decision making taken by financial managers, such as whether investing
in equity or debt securities, would increase the credit through loans short
term or long term, and other business decisions. Analysis of financial
statements is not only useful for financial managers but also all interested
parties (stakeholders) in the company.
B. The
Scope Analysis Financial Report.
a.
Liquidity Analysis
liquidity analysis is an
analysis of the company's ability to meet short-term liabilities, that is
working capital analysis and operating activity analysis of liquidity.
b.
solvency Analysis
solvency analysis is an
analysis of the company's ability to meet all liabilities, both short term and
long term that is capital structure analysis and earnings coverage analysis.
c.
profitability
analysis
Profitability analysis is
also called analysis of earning ratios is an analysis of the company's ability
to obtain a profit, whether based on sales or based on investment. That is revenue analysis, cost of sales
analysis, and expenses analysis.
d.
Cash
Flow Analysis
cash flow analysis is the
analysis statement in cash inflow and cash outflow. On this analysis will be
elaborated about where the sources of the cash acquired the company and where
the cash used by the company.
e.
Banckruptcy
Prediction Analysis
Bankruptcy prediction
analysis is an analysis that can help a company to anticipate possible company
bankruptcy caused by financial problems. the approach in the prediction of
bankruptcy, both Univariate method and multivariate method.
C. Defenition
Erning Per Share (EPS)
EPS
is profitibilitas rate analysis tool the company uses the concept of a
conventional profit. EPS used to evaluate the
common stock in addition to PER (Price
Earning Ratio) in financial
circles. EPS or earnings per shares is the net profit rate for
each sheet is wholly capable earned the company at the time of running
operations. Earnings per share or EPS sheets in getting from profit available
to common shareholders divided by average common shares outstanding.
Earnings
per share valuing the acquired net income per common shares. One of the reasons
investors buy stocks is to get the dividend, earnings per share if the value is
small then it is also possible for small companies to distribute dividends. It
can be said the investors will be more interested in
stocks that have earnings per share higher than stocks that have earnings per
share.
the
formula used to determine a company's EPS is as following :
Net Income − Dividends on Preferred Shares
Earnings per Share
(EPS) =
-----------------------------------------------------------------------------
Weighted Average Number of Common
Shares Outstanding
Earnings
per share is calculated on annual basis i.e. annual net income and preferred
stock dividends are used in the formulas. The use of weighted average common shares
outstanding delivers accurate result however, just a simple average, or the
number of common share outstanding at the end of the year can also be used
instead of weighted average figure for simplicity.
D. For
Example Of The Calculation Of Financial Statements
Company
A paid dividend of $235,100 during the year ended December 31, 2010 and its
weighted average common shares outstanding were 200,000 during the year. There
were no preferred stock outstanding and preferred stock dividend. Calculate the
EPS of company A.
Answer
to question :
235,000 – 0
EPS
= -------------------
200,000
EPS
(2010) = 1.18
To
interpretation : based
on the results of the above calculation of EPS company A of 1.2 or 12 percent
in 2010.
E.
Conclusion.
EPS
is a profitibilitas company-level analysis tool that uses a conventional income
concept. earnings per share valuing the acquired net income per common stock.
earnings per share will increase if the percentage increase in profit for the
white garment is greater than the percentage increase in the number of shares of
common stock outstanding.
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