How To Write Annual Reports

how to write annual reports"how to write annual reports"
How to write a finanical evaulation of a company?

We had to get annual finanical report of a company, after we learn about the report. Now we must write a finanical evaluation, assessment of the company from the perspective of an investor.

Can't really answer your question other than barking up the wrong tree unless we know what kind of industries you are working with. Each industries have their own particulars and strategic issues and analysists watch those tendencies very closely. You have to understand what critical elements confront that particular industry before you do your anaysis.

In general, you start with your ratio analysis. There are many, many ratios that you can track. Some are critical while others may be meaningless. If you are looking at a financial statemenst there should be plenty of numbers to come up with a bunch of financial ratios and give you a good idea at least on the numbers stand point how a company is doing.

1. Asset to liability ratio.... your are looking at how much you own to how much you owe. Some industries are highly leveraged. Some are not. In general a 2 to 1 of Ok.

2. Current Ratio... your short term asset against your short term liability. This is liquidity...our ability to pay bills quickly.

3. Quick ratio....short term assets minus inventory against short term liabilities. This really tells the companie's ability to meet its day to day cash position

4. Inventory turn over...if the company is in sales or manufacturing but is meaningless if you are and airline company.

5. Return on total assets and return on investment...how efficient is the company using its money (or its stoch holders investment)

6. Dividend payments...an investor gets two things back for investing ...dividend and appreication in stock value. Is my dividends pay better than a CD or money market? If the company is not paying dividends, can I expect the stocks to take off like the Dot Com companies a while back?

7. price to earning (P/E ratio), the higher reflects investor confidence in the compay.

8. Profit margin... it tells you how quickly you can break even and how risky the business may be. The road to hell is pathed with volume. Airlines have a very high B/E point and a spike in fuel will put them in the red (That is another thing to watch).

This list goes on and on. But you need to know what are the strategic issues in that industry is in order to have some meaningful analysis. Crunching numbers doesn't do anything. There are other aspects that does not always appear on the financials. Market share, paterns held, management team, research and development, goodwill (the ability to charge premium because of the companies reputation), the company's dependency on an uncontrollable strategic supply such as fuel for an airline company. These are things an investor need to have to assess the health of a company. The following is a place you can find just about any financial you want. I am sure some of them may be useful to you. Have fun.


http://cpaclass.com/fsa/ratio-01a.htm

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how to write annual reports
how to write annual reports
how to write annual reports