article review of "financial management and accounting in state islamic religious councils in malaysia: a grounded theory" by abdul rahim Article Review for Managerial Accounting Economic Value Added (EVA) is a financial concept used to measure the actual profitability of a business operation (Tully and Hadjian 38). Investors and business managers can use EVA to learn stocks that are most likely to rise as well as determine if their business interests are going up in value Article review for managerial accounting The article by Srikumar Rao d “Overhead Can Kill You” basicallydescribes events that can make a company incur losses. It generally discusses the decisions that a company can take in order to make profits by properly allocating costs and labour
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We use cookies to enhance our website for you. Proceed if you agree to this policy or learn more about it. Type of paper: Article Review. Topic: BusinessEquityFinanceInvestmentTaxesWealthSample article review on financial managementCompany.
Company A and company B have very similar as well as very different financial statements. Both the companies are showing positive sales growth. While company A seems to be growing at a very high pace, company B is growing at a steady but slow pace. 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, sample article review on financial management.
Company B is also performing better in the areas of assets and liabilities, sample article review on financial management. Company B has better assets to liability ratio than that of company A. Company A on the other hand has a small equity base and so the return on Equity ROE for Company A is much better than that of Company B. Cash in hand of company B This shows that company B has much more liquidity than company A, sample article review on financial management.
Garden Place Case: Question 2: T-Account T-Account for the journal entries is as below Garden Place Case: Question 5: Projected Income Statement and Balance Sheet We have used the information provided in the case for constructing the Income Statement and Balance Sheet. For Balance sheet lot of information was missing so I made my own assumption about long term and short term liabilities.
For example, sample article review on financial management, the loan from Campbell bank of 32, was considered as a current liability whereas the loan from Campbell bank for pickup truck was assumed to be long term liability because of its duration of more than 1 year. Balance Sheet Part II Question 1: Vertical Analysis of Company A and B Vertical Analysis is one of the most used financial analyses for the financial statements, sample article review on financial management.
Also known as the common-size analysis, this analysis shows the percentage contribution of each elements of a financial statement compared to a base alongside the absolute contributions Averkamp, Then the individual assets or assets groups in the balance sheet are shown as a percentage of total assets. Similarly, individual liabilities as shown in the balance sheet are also shown as percentage of total liabilities. For conducting a vertical analysis of an income statement, the base is generally taken as the total sales figure Bushman, Other income statement items like cost of goods sold, gross profit, sample article review on financial management, administrative cost, taxes, interest, operating profit and net profit are shown as the percentage of sales, sample article review on financial management.
Generally the vertical analysis is done for a single period but to make it more useful many analysts do a multiple period vertical analysis. There are very few long term asset classes for the company as per the balance sheet, sample article review on financial management.
The second largest asset category is accounts receivable. Incompany A had a The cash in hand for company A has significantly increased from 0. This may have been achieved due sample article review on financial management better cash management practices and working capital management.
Notes payable to banks remains the highest contributor to current liabilities. Current payables almost match identically with the current receivables which shows that the company has a healthy cash circulation.
Paid in capital remained same in and but due to some profit in the overall retained earnings have increased as percentage to total shareholders equity. As seen in the vertical analysis above for company A the main reason for this is the cost of goods sold. In most of the cases when the sales go up the cost of goods sold as percentage of sales comes down due to economies of scale. However, it is not the case for company A. The cost of goods sold has gone up as a percentage of sales.
It indicates that probably company A is trying to produce that extra demands by overtime or sourcing it from some costly outsource partners. Balance Sheet Company B has a much superior balance sheet than company A.
As we can see that it has a very low total liabilities percentage compared to total assets. This shows that the company has a very healthy cash flow position. Company B is very liquid as its cash and cash equivalent percentage have gone up substantially from to and its inventory has gone down, sample article review on financial management.
It seems that company B may have come up with better practices to collect receivables and inventory turnover. Shareholders equity has not seen many changes as there were not much contribution from profit. Liabilities as percentage of total assets are low and that is a good indicator for company B. The majority of the liabilities are from accounts payable and salaries and wages payable as expected. Income Statement Company B has an interesting income statement. Net sales for the company have grown steadily from to However, the gross profit has gone down marginally from This shows that the cost of goods may have gone up.
This may be because of the increase in price of raw materials, fuel cost or increase in labor cost. However, as the fixed cost sample article review on financial management almost same, the overall operating margin has gone up from 2. Net income also has improved from 1. Among all investors return on equity is sample article review on financial management of the most monitored financial numbers. If a company has a very strong Return on Equity ROE it shows that the management creates high value for the investors Throp A strong measure of ROE means that it is less risky for the investor to invest in that company and the company is in sound financial health.
However, there are critics of simple ROE and they prefer much rigid measures to conclude that a company is in sound health. If the number is larger, it means that it is a better company for investment and vice versa. The denominator of the above formula goes down and the ROE value goes up.
However, increasing the debt is not always good for a company. Highly leveraged companies may show high ROE values but that does not mean that they are financially sound Pinsent, It has been mentioned before that simple ROE calculation cannot account for leveragability of a company or asset utilizations.
DuPont analysis breaks down the simple formula into three components for ROE calculation Pinsent, This three step DuPont ROE calculation provides much deeper understanding of a company Pinsent Let us now calculate the ROE of company A. This means that compared to its assets the equity base is small for company A. Although the overall ROE gives a good picture but actually the figure is inflated due to small equity base and high liabilities for company A. This company is highly leveraged.
On the other hand, all the three ratios for company B seem to be in good shape. Profit margin sample article review on financial management better than company A and the equity multiplier is 1.
The asset turnover for company B is not as good as company A and this can be improved. On the whole, it seems although the ROE for company A appears better than that of company B, the overall financial health of company B is better. Horizontal analysis is also known as trend analysis. In vertical analysis generally a financial statement is compared with a base figure Harvey, In most of the cases, all figures in income statement are compared as percentage of sales.
However, in case of horizontal analysis a base year is taken for comparison of figures. All the figures in other years are compared with the same figures of the base year. This helps in identifying the trend of certain financial statement figures over time. Horizontal analysis is expressed in absolute monetary term or in percentage term Finn, This shows that total assets as well as total liabilities have gone down for company A.
Reduction in total liabilities is a good thing for the company mainly triggered by better cash management as Trade Account payable is reduced. 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. Total assets were almost unchanged for the company in the two years. Income Statement Income statement for company B is interesting and even the trend has some interesting patterns. We can see that the net sales of company B are consistently going up.
Compared to the sales went up by 5. Cost of sales actually went up even more almost by However, company B is showing some really good progress in selling and administrative expense as administrative expense showed continuous decline from to In due to heavy restructuring charges the operating expense went down by Furthermore, the net income improved by almost For Company B, vertical analysis of cash flow statement throws much sample article review on financial management picture of the financial health.
Net cash flow in operating activities has been inconsistent. In fact we can see that the cash flow in was negative which contributed to the low cash on hand for the year. However, Company B bounced back from that cash liquidity problem in and in ended with a lot of cash from the operating activities mainly due to better management of cash payable and receivable. Company B has not invested much in either of the years and continues to invest only a very small portion of its cash in investing activities.
Analysis and Uses of Financial Statements. Delta Publishing Company. What is the difference between vertical analysis and horizontal analysis?. Accounting Coach. Financial Statement Analysis Methods: Horizontal vs. Vertical Analysis.
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· Financial managers have a complex and challenging job. They analyze financial data prepared by accountants, monitor the firm’s financial status, and prepare and implement financial plans. One day they may be developing a better way to automate cash collections, and the next they may be analyzing a proposed blogger.com: Lawrence J. Gitman, Carl McDaniel, Amit Shah, Monique Reece, Linda Koffel, Bethann Talsma, James C The Role of Financial Management in the Decision-making of Business Bakhit, G. R1,2 Alamin, M.,A 1 1 Community College, Najran University, Saudi Arabia 2 Faculty of Economic and Administrative Sciences- Blue Nile University, Sudan. Abstract: This study discussed the role of financial management in the decision-making in enterprises applying it on the Kenana Sugar Co., Ltd. The study aims to File Size: KB Sample Management Journal Article Review APA Style - detailed. Peter Bakke. Running Head: JOURNAL ARTICLE CRITIQUE 1 Journal Article Critique Peter Bakke Walden University Professor Thomas Spencer, Ph.D. RSCHZ-1 – Advanced Quantitative Reasoning & Analysis July 16, Running Head: JOURNAL ARTICLE CRITIQUE 2 Introduction Hsu, Chen, and Cheng () used a
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