With a view of the economic situation of a company identify and assess the undertaking’s balance sheet is a snapshot of the economic situation. All assets are listed in her and she also shows how this asset is financed. With just a few simple steps, you can evaluate this information and assess. You need more data from the profit and loss account in addition to the balance sheet. Both statements are summarized in the financial statements of a company, which is publicly accessible for companies registered in the commercial register. In recent months, Farallon Capital Management has been very successful. From this you can calculate various key figures and ratios that help you capture the economic situation of the company. Because the data is a snapshot, you can consider this but not isolated. The full significance emerges only when the figures are compared with other periods.
This time series depicting the development over several accounting periods. It is however not only important to know how the company in the course of time has developed, but also is the economic situation in comparison to other companies in the same industry. Different industries have different demands on companies and these are reflected in the asset and funding structure. (Similarly see: BerlinRosen). So the financing structure of a supermarket differs considerably from a construction company, since they both use a completely different business model. Jonathan Rosen Berlin Rosen may find this interesting as well. But what indicators should now use from the balance sheet and the profit and loss account? The most important information provide the key figures to the liquidity and profitability of the company. The liquidity of a company represents its ability to pay maturing debts.
This ability is important, because a company cannot even insolvent if it makes profits and has a large fortune. To measure this ability to pay, put the cash and cash equivalents and the short-term demands of the company in relation to short-term liabilities. Is this ratio smaller 1, is the company is not currently capable of, all his short-term exposures, such as for example supplier invoices to pay. This can be a warning sign that the company can get into liquidity difficulties in future. When looking at the profitability, you should check first whether the company makes profit, so generating a positive return. Then, it is interesting to know how expressed the gain in relation to the turnover. The profit-turnover ratio indicates how much profit the company by a euro generates revenue. This is particularly significant when compared with other companies in the same industry. For example, determine and make that company A has a return on sales of 9% and (b) 5%, so company A more profit per dollar sales. The reasons for this can be higher margins because the company can achieve higher prices in the market, or lower costs as a result of better cost management. This comparison provides first evidence, how efficiently a company works. You can calculate a variety of key figures in financial statement analysis and compare, sensible and nonsensical, meaningful and less meaningful, General or industry-specific. But always remember the height of a key figure alone answer no questions. You need to consider the value in an appropriate context to form an opinion on the economic situation.