Reviewing an article is not as easy as it sounds: it requires a critical mind and doing some extra research. Viewed on 3rd January 2014 The cash in hand for company A has significantly increased from 0.7% in 2010 to 1.6% in 2011. Notes payable to banks remains the highest contributor to current liabilities. For Balance sheet lot of information was missing so I made my own assumption about long term and short term liabilities. Question 1: Vertical Analysis of Company A and B The purpose of financial management in the operation of all FAN activities is to fulfill the organization’s mission in the most effective and efficient manner and to remain accountable to stakeholders, including clients, partners, funders, employees, and the community. WowEssays, Mar 05, 2020. Equity Multiplier = 6.186 Contemporary Financial Management. 2012. Finally, this article argues that innovations are value neutral, and it is up to us to use them for good or bad purposes. Article Review, Topic: I'm fine with missing my deadline, WowEssays. Financial Literacy Financial literacy is a basic knowledge that people need in order to survive in a modern society. Dreaming about the Million Dollar Bonuses and Global Jet setting? If the number is larger, it means that it is a better company for investment and vice versa. This sample paper on (Sample Paper on Financial Management) was uploaded by one our contributors and does not necessarily reflect how our professionals write our papers. Asset Turnover = 1.49 Income statement for company B is interesting and even the trend has some interesting patterns. Indeed, the key theme in this article is that most employees think about the finance function only when their salaries and bills are paid and this article suggests that employees take some time to understand this function in the larger scheme of things within corporates. In fact we can see that the cash flow in 2011 was negative which contributed to the low cash on hand for the year. If you're looking for a extensible and beneficial small business financing choice then these are some of the options you can deal with. NASDAQ. We use cookies to enhance our website for you. Shareholders equity has not seen many changes as there were not much contribution from profit. The review is also conducted in order for the management to be able control their budget cost for the production and projects that are carried out. Decoding DuPont Analysis. Horizontal Analysis. Shareholders’ Equity = $ 43.602 In 2010, the current liabilities were almost 98% of the total liabilities which reduced to 94% in 2011 due to conversion of some short term debts to long term instruments. Financial managers are expected to report ethical issues that affect a firm’s market. This three step DuPont ROE calculation provides much deeper understanding of a company (Pinsent 2013). Percentage Change = (absolute change / amount of the item in base year) * 100. Financial review is usually included in monthly budget meetings in order to have proper allocation of the total current cash on hand. This means that the writer should analyze, compare, summarize, and classify the information presented in the text of the article. Sales = $ 514.633 million While company A seems to be growing at a very high pace, company B is growing at a steady but slow pace. Viewed on 3rd January 2014 2020. includeastatementthatareviewissubstantiallylessin scopethananaudit,theobjectiveofwhichistheexpres- sionofanopinionregardingthefinancialstatementsasa whole,andthat,accordingly,theaccountantdoesnotex- presssuchanopinion. This may be because of the increase in price of raw materials, fuel cost or increase in labor cost. On the other hand company B is also feeling the impact of the increasing input cost but it has managed it better than Company A and has been able to compensate it to some extent by reducing its fixed cost. Here are Some Things that Would Help You Prepare, Want to Become a Financial Professional? Accounting for Management. Vertical Analysis is one of the most used financial analyses for the financial statements. If the article has a scientific nature, the author needs to evaluate the credibility of the research, check the results, and compare it to other related researches conducted on a similar topic. Article reviews are a common practice in many subjects and are an important part of larger research papers. It indicates that probably company A is trying to produce that extra demands by overtime or sourcing it from some costly outsource partners. The problem with this simple ratio is it can go up even when a company takes more debt and reduce the equity base. In case of total assets it seems that the company was able to keep a low inventory base and that means that the company had more cash in hand. CiteScore: 3.8 ℹ CiteScore: 2019: 3.8 CiteScore measures the average citations received per peer-reviewed document published in this title. WowEssays. Jan, Irfanullah. Generally the vertical analysis is done for a single period but to make it more useful many analysts do a multiple period vertical analysis. This article explains the difference between innovation and financial innovation. There are very few long term asset classes for the company as per the balance sheet. However, the subject uses technical terminology and jargon that … 2014. In addition, this article also discusses how bankers and financial professionals across the value chain and the hierarchy of the BFSI Pyramid use financial modeling to assess the soundness of the financial decisions. Get help with 11% off using code -, No, thanks! For conducting a vertical analysis of an income statement, the base is generally taken as the total sales figure (Bushman, 2007). Financial Statement Analysis Methods: Horizontal vs. Vertical Analysis. There are some tips here. In order to accomplish this, FAN commits to providing accurate and complete financial data for internal and external use by the Executive Director and the Board of Directors. 2. Net Profit Margin = 1.491 This may have been achieved due to better cash management practices and working capital management. Capitalization represents permanent investment in companies excluding long-term loans. Throp, Wayne A. Article Review Samples. This is the reason why the finance function is important. ROE for company B = 0.039 Let’s first take a look at the ROE of company A and B. Analysis and Uses of Financial Statements. 2013. The second largest asset category is accounts receivable. Income Statement Horizontal analysis is also known as trend analysis. Viewed on 3rd January 2014 < http://www.apexcpe.com/publications/171016.pdf> Bushman, Melissa. 2007. This shows that the cost of goods may have gone up. Read on for tips and suggestions on how you can prepare for a demanding career which is what finance is all about. Read More. This article describes the dire economic situation at Eskom, which is a utility company in South Africa. Shareholders’ equity showed a slight increase owing to small increase in retained earnings. There are maily 4 Finance Functions - Investment Decision, Financial Decision, Dividend Decision and Liquidity Decision. Capital Structure is referred to as the ratio of different kinds of securities raised by a firm as long-term finance. 2016 – 19). This shows that company B has much more liquidity than company A. Company B is also performing better in the areas of assets and liabilities. Peavler, Rosemary. Financial Management Article Reviews Examples. 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