Financial Statement Analysis (Final)

NAMA : ANDI NUGROHO S        NIM : 361 10 008       KELAS : 3A D3 AKUNTANSI

METODE CURRENT RATIO

Understanding of financial statement analysis

Analysis of financial statements is a thoughtful process in order to help evaluate the financial position and results of operations of the company in the present and the past, in order to determine the estimates and predictions of the most likely about the condition and performance of the company in the future. Analysis of the financial statements, but in fact many in the present study the authors use financial ratio analysis because the analysis is more often used and much simpler.

The significance of financial statement analysis

The significance of financial statement analysis are as follows:

1.      To management: to evaluate the company's performance, compensation, career development

2.      For shareholders: to investigate the performance of the company, income, investment security.

3.      For creditors: to determine the company's ability to pay off the debt with interest.

4.      For the government: taxes, approval to go public.

5.      For employees: adequate income, quality of life, job security

Understanding financial statements

Financial report is a record of a company's financial information in the accounting period that can be used to describe the performance of the company. These financial statements are part of the financial reporting process. Complete set of financial statements usually include:

·         Balance Sheet

·         The income statement

·         Statement of changes in equity

·         Statements of changes in financial position that can be presented in the form of a cash flow statement or cash flow statement

·         notes and other statements and explanatory material that are an integral part of these financial statements

Users of Financial Statements

• Investors

• Employees

• Lender

• Suppliers and other business creditors

• Subscribers

• Government

• Community

Methods of analysis of financial statements

Liquidity is measured by the ratio of current assets divided by current liabilities. Companies that have at least had a healthy liquidity current ratio of 100%. Measure of liquidity that further illustrate the level of corporate liquidity is indicated by the ratio of cash (cash against current liabilities). Example: You pay electric, telephone, water taps, employee salaries, etc..

Liquidity ratios include the following:

• Current Ratio: is the comparison between total current assets by current liabilities (current assets / current liabilities "). Current Assets are items that aged one year or less, or the normal operating cycle of business bigger. Current Liabilities are obligations within one (1) year or the normal operating cycle of the business. availability of cash resources to meet those obligations from cash or cash conversion of current assets.

• Quick Ratio: is the comparison between current assets minus inventories by current liabilities. Inventories consist of office equipment, raw materials, goods in process inventory, and finished goods inventory. The purpose of inventory management is required to hold supplies sustainable operations at minimum cost. A company that has a quick ratio of less than 1:1 or less than 100% is considered a good level of liquidity.

Study case

The current ratio is the ratio between current assets to current liabilities of a company. For example, if the current assets of the company is 50,000,000 while debts WXY Rp40.000.000 smooth, smooth is the ratio of 50,000,000 divided by 40,000,000, or equal to 1:25.

conclusion

The bigger the fund placed to meet the company's liquidity, the company may lose the opportunity to get additional funds because funds that do not generate profits.