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    Fundamentals of Accountancy, Business and Management 2: Lesson 5 - 6: Financial Statement Analysis

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    Jerico Marcelino
    This document provides an overview of lessons on financial statement analysis and planning and working capital management, outlining objectives, key concepts, and assignments related to analyzing company performance, preparing budgets and financial projections, and understanding sources of short-term and long-term funds. Students are asked to read chapters in their textbook, answer questions, and discuss topics like the importance of planning and differences between debt and equity financing.

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    Fundamentals of Accountancy, Business and Management 2: Lesson 5 - 6: Financial Statement Analysis

    Uploaded by

    Jerico Marcelino
    43 views2 pages
    This document provides an overview of lessons on financial statement analysis and planning and working capital management, outlining objectives, key concepts, and assignments related to analyzing company performance, preparing budgets and financial projections, and understanding sources of short-term and long-term funds. Students are asked to read chapters in their textbook, answer questions, and discuss topics like the importance of planning and differences between debt and equity financing.

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    FABM 5&6

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    This document provides an overview of lessons on financial statement analysis and planning and working capital management, outlining objectives, key concepts, and assignments related to analyzing company performance, preparing budgets and financial projections, and understanding sources of short-term and long-term funds. Students are asked to read chapters in their textbook, answer questions, and discuss topics like the importance of planning and differences between debt and equity financing.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    43 views2 pages

    Fundamentals of Accountancy, Business and Management 2: Lesson 5 - 6: Financial Statement Analysis

    Uploaded by

    Jerico Marcelino
    This document provides an overview of lessons on financial statement analysis and planning and working capital management, outlining objectives, key concepts, and assignments related to analyzing company performance, preparing budgets and financial projections, and understanding sources of short-term and long-term funds. Students are asked to read chapters in their textbook, answer questions, and discuss topics like the importance of planning and differences between debt and equity financing.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Fundamentals of Accountancy, Business and Management 2

    Lesson 5 – 6: Financial Statement Analysis


    (Oct. 26 – Nov. 6, 2020)

    Objectives: Perform vertical and horizontal analyses of financial statements of a single proprietorship

    Explore:
    Assignment for Research
    1. Read the news article from the Manila Times business section about the
    performance of Jollibee for the first quarter of 2015, the link will be provided through
    our facebook group.
    2. In relation, answer the questions inside the assignment for research section on page
    94 of the book.

    Discussion:
    1. Horizontal Analysis
    - also known as trend analysis
    Financial Statement Analysis - comparison of line item (account)
    - a process of evaluating risks, over a number of periods
    performance, financial health
    and future prospects of a
    business using computational 2. Vertical Analysis
    techniques with the objective of - preparation of common-sized
    making decisions financial statement
    - technique that expresses each FS
    line item as percentage of a base
    amount

    Limitations of Financial statement analysis:


    a.) historical performance may provide an indication but will not ensure future performance
    b.) a good financial analysis will be worthless if the FS are erroneous or fraudulent
    c.) FS of companies may not be directly comparable if there are differences in the accounting treatment
    of like transactions.

    Note: The topic financial ratios on lesson 6 will not be included since it has been already discussed in your
    business finance subject.

    Deepen:
    Read chapter 5 and 6, and then answer the following:
    a) True/false chapter test on page 101
    b) Comprehensive problem no.5 on pages 103 – 104
    c) True/false chapter test on pages 116 – 117
    d) Modified matching type on page 117
    *Put your answer on a separate paper, preferably yellow paper. For questions, clarification or reactions, do
    not hesitate to send a message in our group chat.
    Business Finance
    Lesson 3 – 4: Planning & Working Capital Management;
    Sources and Uses of Short term and Long term Funds
    (Oct. 26 – Nov. 6, 2020)
    Objectives:
     identify the steps in the financial planning process
     illustrate the formula and format for the preparation of budgets and projected financial statement
     explain tools in managing cash, receivables, and inventory
     compare and contrast the loan requirements of the different banks and nonbank institutions and cite these institutions in the
    locality
    Explore:
     Briefly discuss the following questions based on your own idea, write your answer in your assessment notebook:
    1. Why is planning the most important financial statement account in forecasting?
    2. How does budgeting affect your daily life?
    3. Differentiate debt financing from equity financing
    4. How does time affect financing activity?
    Discussion:
    Planning is setting the goals of the organization and identifying ways to achieve them. It is very much related to another
    management function, controlling.
    Budget Preparation (Part of Planning) –
    Steps in Planning: Different Budgets:
     set goals or objectives
     identify resources  Sales budget
     identify goal-related tasks  Production budget
     establish responsibility centers for accountability  Operating budget
    and timeline  Cash budget
     establish an evaluation system for monitoring *projected financial statement will also be
    and controlling prepared
     determine contingency plan

    EFN = ΔTotal Asset – (ΔTotal Liability + ΔTotal Stockholders Working Capital Management
    Equity) Financial policies:
    1. maturity-matching working capital financing
    Net Working Capital = current assets – current liability policy
    2. aggressive working capital financing policy
    3. conservative working capital financing policy
    sources of fund


    debt Form of borrowing from banks or lending
    institution or issuance of debt securities


    equity Issuance of new shares of stocks and
    retained earnings plowed back into the
    operations of the company

    Sources of Short-Term Funds Sources of Long-Term Funds


     suppliers’ credit  equity investors
     advances from stockholders  internally generated funds
     credit cooperatives  banks
     bank loans  bond market
     lending companies  lending companies
     informal lending sources such as
    5-6

    Deepen:
    Read chapter 3 and 4 of your book and answer the following, put your answer in your assessment notebook:
    1. Exercises 1 and 5 on page 72 and 73 respectively
    2. Exercises 1 and 2 on pages 88 – 90

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