Need business and finance help to Write a 1 page paper, double spaced that summarizes the Seminar and what you learned

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Unit 3 Seminar, Write a 1 page paper, double spaced that summarizes the Seminar and what you learned.  Seminar Attached.

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Chapter 2: Financial Statements and Ratio Analysis  financial information is used to assist investment and financial decision making  Helps managers with efficiency analysis and identification of problem areas within the firm  Helps managers • identify strengths • Identify weaknesses  Useful for credit managers evaluating loan requests and investors considering security purchases  Cross Sectional Analysis • Comparison of one firm to other similar firms  Sources of cross sectional information include: • Value Line • Risk Management Association • Dun and Bradstreet  Time Series Analysis • Evaluation of a firm’s financial performance over time, utilizing financial ratio analysis  Profitability ratios Unit 2  Liquidity ratios Unit 2  Activity ratios Unit 2  Financing ratios Unit 3  Market ratios Unit 3  Profitability ratios relate to profit margins and the earnings of the firm  Measure how effectively the firm uses its resources to generate income  Provide analysts and managers with additional information on firm performance  Return on Equity (ROE) • Tells what the firm earns on every dollar of equity  Return on Assets (ROA) • Measures profit per dollar of assets  Gross Profit Margin • The gross profit earned on each dollar of sales  Operating Profit Margin • Measures only profits earned on operations  Net Profit Margin • Percentage of each sales dollar that remains after all costs have been deducted What is the Return on Assets (ROA) if net income was $55,000, total assets are $115,000, EBIT was $100,000, and equity is $75,000? ROA= net income after tax/total assets 55,000/115,000= 47.8% What is the Return on Equity if net income was $55,000, total assets are $115,000, EBIT was $100,000, and equity is $75,000? ROE= net income after tax/stockholder equity 55,000/75,000=73.3% If net income was $10,000, interest expense was $4,000, and taxes were $1,000, what is the operating profit margin if sales were $50,000? Operating profit margin= operating profit/sales (10,000+4,000+1,000)/50,000=30% Operating profit is the earnings before interest and taxes  Measure the degree to which a firm is leveraged  Debt ratio • Proportion of assets financed by debt  Debt equity ratio • Shows the relationship between the suppliers of long -term debt and equity  Times interest earned ratio (TIE ratio) • Measures the firm’s ability to meet its interest payments What is a firm’s times interest earned if it posts revenues of $200,000, taxes of $35,000, expenses of $100,000, and interest of $30,000? TIE= EBIT/Interest (200,000-100,000)/30,000=3.3 times EBIT is revenues minus expenses. You do not need to incorporate the taxes and interest into the calculation of EBIT on this one.  Based on the firm’s security price  Earning per share (EPS) • Reports the net income per share of common stock  Price earnings (PE) • The amount investors are willing to pay for $1 of income by the firm  Market to book • Measures how the market values the firm If a firm has $100,000 shares of common stock outstanding and has just recorded a $45,000 profit, what is its PE ratio if its current share price is $35? PE Ratio= market price of common stock/EPS 35/(45,000/100,000)=78  Financial statements that have every line converted into a ratio by dividing income statement data by total sales and balance sheet data by total assets  Specialized type of ratio analysis in which the denominator of every ratio is total assets or total sales  Makes benchmarking easier  The financial analysis of a firm should include the following steps • Analyze the economy in which the firm operates • Analyze the industry in which the firm operates • Analyze the competitors that currently challenge the firm • Analyze the strengths and weaknesses of the firm, using common-sized statements and ratios  Ratio interaction • The effect one ratio has on another • Ex: If sales fall, inventory turnover will also fall if inventory is constant  Reading between the lines • Ratios do not often tell the whole story • Ratios will provide flags that analysts must investigate to find the truth
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