Posted: April 7th, 2015

Financial Statement Analysis

Financial Statement Analysis

The learning objectives of this chapter are to:
¦    discuss the elements of financial statement analysis, including review of the financial statements, examination of the notes that accompany the financial statements, calculation of ratios, and final assessment;
¦    explain the parts of a financial statement review, including the audit opinion letter and the individual financial statements;
¦    explain the importance of examining the notes that accompany the financial statements and discuss the note that focuses on significant accounting policies, as well as other more specific notes;
¦    define ratio analysis and discuss the role that ratios play in assessing the financial situation of an organization;
¦    explain the importance of comparing the organization’s ratios with its own ratios over time, as well as those of comparable organizations, and the industry as a whole;
¦    provide cautions in the use of ratio analysis;
¦    define and explain a number of major classes of ratios and specific individual ratios that are of value in financial statement analysis; and
¦

Using the financial statements from the Major Medical Center Case Study at the end of chapter 14, analyze the following:

Review the auditor’s opinion letter and analyze any concerns.
Review the financial statements. Analyze any unusual items and examine the balance sheet, operating statement, and cash flow statement.
Review the notes and analyze any causes for concern.
Calculate the following ratios using Excel: common size, current, quick, days of cash on hand, receivables turnover, average collection period, fixed asset turnover, total asset turnover, debt, debt to equity, times-interest-earned, operating margin, total margin, ROA, and RONA.
Evaluate Major Medical Center’s financial status.sheet, operating statement, and cash flow statement?

Submit to your instructor your three page Word document (not including the title and reference pages) and your Excel worksheet. Your paper should be formatted according to APA style, and you must cite at least three scholarly sources.