Analyse road map
Analyse sectorielle : Analyse road map. Recherche parmi 298 000+ dissertationsPar totokokototo • 11 Décembre 2017 • Analyse sectorielle • 723 Mots (3 Pages) • 841 Vues
Financial analysis
Road map to organise a company analysis or comparison between two competitors
Financial statement analysis is a judgmental process. One of the primary objectives is identification of major changes in trends, and relationships and the investigation of the reasons underlying those changes. The judgment process can be improved by experience and the use of analytical tools. Probably the most widely used financial analysis technique is ratio analysis, the analysis of relationships between two or more line items on the financial statement. Financial ratios are usually expressed in percentage or times. Generally, financial ratios are calculated for the purpose of evaluating aspects of a company's operations and fall into the following categories:
- Liquidity ratios measure a firm's ability to meet its current obligations.
- Profitability ratios measure management's ability to control expenses and to earn a return on the resources committed to the business.
- Leverage ratios measure the degree of protection of suppliers of long-term funds and can also aid in judging a firm's ability to raise additional debt and its capacity to pay its liabilities on time.
- Efficiency, activity or turnover ratios provide information about management's ability to control expenses and to earn a return on the resources committed to the business.
Step one: first glance: presentation
Sources History Company’s presentation Annual report | Tools Breakdown of sales By activity By market Breakdown of ownership | Targets To size the company To understand business model To appreciate level of competition Entry barriers? Global or local ? Good times or bad times (crisis impact?) | Difficulties More qualitative than quantitative vision |
Step two : global visions around global figures
Sources Mainly Key figures Sales, income before or after tax; total assets, shareholder’s funds, Number of employees | Tools , ratios & KPI Change in sales (fixed)Asset turnover ROA ROS ROE Asset per employee Sales per employee | Provided by Osiris No Y Y Y Y Y Y | Targets To appreciate growth To appreciate efficiency Economic profitability Commercial performance Financial performance Business model Global Productivity Workforce evolution |
Step 3 : balance sheet and risk analysis
Sources Balance sheet Balance sheet in % Cash flow statement | Tools & ratios & KPI Balance sheer components Average Depreciation rate of fixed assets WC calculation Stock in days of sale Receivable in days Payable in days WC in day of sales NWC or NCA Global leverage Gearing Current ratio Acid test ratio (quick) NCA, WC , CASH relationship | Provided by Osiris N N Y Y Y Y Y Y N Y Y Y Partially | Targets To understand more what is employed by the business To appreciate Age & renew of Fixed Assets To appreciate requirement of business cycle Relative volume of stocks & trend Relative volume of delay of payments, trends Relative volume of payable and trends Global vision of capital employed by the cycle Financing policy, mix of equity to debt, financial structure… Capability to pay short debt More meaningful liquidity ratio Global vision of financial equilibrium (WC per osiris is only commercial WC) |
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