ACCOUNTING FUNDAMENTALS

FINANCIAL
STATEMENT
ANALYSIS
By: “Ma’am Shie”
At the end of this topic, the learners are
expected to:
 Appreciate the significance of financial statement
analysis in business
 Perform and understand how to apply horizontal
and vertical analysis using Microsoft excel
 Familiarize with the basic ratio analysis performed
by entities
 Interpret the results of financial statement analysis
 ACCOUNTING
DEFINITION
 ART OF RECORDING, CLASSIFYING,
SUMMARIZING, in a significant manner
and in terms of money, transactions and
events which are in part at least of financial
character, and INTERPRETING the results
thereof(AICPA)
 FUNCTIONS
 RECORDING – Bookkeeping
 CLASSIFYING – Grouping together similar
items
 SUMMARIZING – Financial statements
 INTERPRETING – Financial statement
Analysis
 FINANCIAL STATEMENT ANALYSIS

The process of evaluating risks,

performance, financial health and
future prospects of a business by
using computational and analytical
techniques.
 Financial Analysis
Horizontal Analysis (Comparative
F/S)
Vertical Analysis (Common-size F/S)
Ratio Analysis
Solvency, Liquidity, Profitability,
Stability
FINANCIAL ANALYSIS TECHNIQUES
HORIZONTAL
ANALYSIS
Each item in the financial
statements of the current
period is compared with the
prior period. The peso
increase/dec is computed and
expressed in percentage.
(Comparative F/S)
VERTICAL ANALYSIS
 The ratio of each item in
the financial statements to
a certain base is obtained
and expressed in
percentage (Common-Size
F/S)
 For SCI – Net Sales
 For SFP – Total Assets
 RATIO ANALYSIS
SOLVENCY RATIOS LIQUIDITY RATIOS

Ability to pay maturing current liabilities Ability to convert non-cash assets into cash

NET WORKING CAPITAL INVENTORY TURN OVER

Current assets – Current Liabilities Cost of Sales
Average Inventory

AGE OF INVENTORY
CURRENT RATIO
365/Inventory Turn over
CURRENT ASSETS / CURRENT LIAB
AR TURN OVER
NET MONETARY ASSETS
Net Credit Sales/Average AR
QUICK ASSETS-CURRENT LIAB
AGE OF AR
365/AR TURNOVER
 RATIO ANALYSIS
STABILITY PROFITABILITY

Ability to pay principal on long term Ability to earn adequate profits or high rate
liabilities of return

DEBT UTILIZATION RATIO GP BASED ON SALES

TOTAL LIAB/TOTAL ASSETS Gross profit
Net Sales

RETURN ON SALES
EQUITY RATIO
Net profit/Net Sales
OWNER’S EQUITY/TOTAL ASSETS
RETURN ON ASSETS
DEBT-EQUITY RATIO
Net profit/Ave. Total Assets
TOTAL LIAB/OWNER’S EQUITY
RETURN ON EQUITY
Net Profit/Ave Owner’s Equity
RATIO ANALYSIS
Mamshie Traders
Statement of Financial Position
As of December 31,2021

ASSETS
2021
Current Assets
SOLVENCY RATIOS Cash
Accounts Receivable
28,300.00
200,000.00
Inventories 50,000.00
Total 278,300.00
Ability to pay maturing current liabilities Non-Current Assets
Land 50,000.00
Building 50,000.00
Machinery 150,000.00
Office Equipment 40,000.00
NET WORKING CAPITAL Furnitures and Fixtures 9,000.00
Total 299,000.00
Current assets – Current Liabilities
TOTAL ASSETS 577,300.00
LIABILITIES
Current Liabilities
Notes payable 15,000.00
Accounts Payable 79,000.00
Accrued Expenses 6,000.00
Total 100,000.00
Non-Current Liabilities
Long-term Notes payable 225,000.00
TOTAL LIABILITIES 325,000.00
OWNER'S EQUITY
Mamshie, Capital 252,300.00

TOTAL LIABILITIES AND OWNER'S EQUITY 577,300.00

RATIO ANALYSIS ASSETS
2021
Current Assets
Cash 28,300.00
SOLVENCY RATIOS Accounts Receivable
Inventories
200,000.00
50,000.00
Total 278,300.00
Non-Current Assets
Land 50,000.00
Building 50,000.00
Machinery 150,000.00
Office Equipment 40,000.00
NET WORKING CAPITAL Furnitures and Fixtures 9,000.00
Total 299,000.00
278,300-100,000 = P178,300
TOTAL ASSETS 577,300.00
LIABILITIES
Current Liabilities
NET MONETARY ASSETS Notes payable 15,000.00
Accounts Payable 79,000.00
QUICK ASSETS-CURRENT LIAB Accrued Expenses 6,000.00
Total 100,000.00
Non-Current Liabilities
Long-term Notes payable 225,000.00
OWNER'S EQUITY
Mamshie, Capital 252,300.00
TOTAL LIABILITIES AND OWNER'S
EQUITY 577,300.00
RATIO ANALYSIS ASSETS
2021
Current Assets
Cash 28,300.00
SOLVENCY RATIOS Accounts Receivable
Inventories
200,000.00
50,000.00
Total 278,300.00
Conclusion: Solvent on a short term basis, Non-Current Assets
large positive net working capital and net Land 50,000.00
Building 50,000.00
monetary assets. Machinery 150,000.00
Office Equipment 40,000.00
NET WORKING CAPITAL Furnitures and Fixtures 9,000.00
Total 299,000.00
278,300-100,000 = P178,300
TOTAL ASSETS 577,300.00
LIABILITIES
Current Liabilities
NET MONETARY ASSETS Notes payable 15,000.00
Accounts Payable 79,000.00
238,300-100,000= 138,300 Accrued Expenses 6,000.00
Total 100,000.00
Non-Current Liabilities
Long-term Notes payable 225,000.00
OWNER'S EQUITY
Mamshie, Capital 252,300.00
TOTAL LIABILITIES AND OWNER'S
EQUITY 577,300.00
 RATIO ANALYSIS
Mamshie Traders
Comparative Statement of Financial Position
As of December 31,2021
LIQUIDITY RATIOS
ASSETS
2020 2021
Current Assets
Cash 15,000.00 28,300.00
Accounts Receivable 135,000.00 200,000.00
Inventories 75,000.00 50,000.00
Total 225,000.00 278,300.00 INVENTORY TURN OVER
Non-Current Assets
Land 50,000.00 50,000.00 Cost of Sales
Building 55,000.00 50,000.00
Machinery 170,000.00 150,000.00 Average Inventory
Office Equipment 40,000.00 40,000.00
Furnitures and Fixtures 10,000.00 9,000.00
Total 325,000.00 299,000.00 MamShie Traders
Income Statement
TOTAL ASSETS 550,000.00 577,300.00 Year Ended December 31,2021
2021
Net Sales 500,000.00
Less: Cost of Sales
Beginning Inventory 75,000.00
Purchases 265,000.00
Cost of Goods available for Sale 340,000.00
Less: Ending Inventory 50,000.00
COST OF SALES 290,000.00
Gross Profit 210,000.00
 RATIO ANALYSIS
Mamshie Traders
Comparative Statement of Financial Position
As of December 31,2021
LIQUIDITY RATIOS
ASSETS
2020 2021
AGE OF INVENTORY
Current Assets
Cash 15,000.00 28,300.00 365/Inventory Turn over
Accounts Receivable 135,000.00 200,000.00
Inventories 75,000.00 50,000.00
Total 225,000.00 278,300.00 INVENTORY TURN OVER
Non-Current Assets
Land 50,000.00 50,000.00 290,000/62,500 = 4.64 x
Building 55,000.00 50,000.00
Machinery 170,000.00 150,000.00
Office Equipment 40,000.00 40,000.00
Furnitures and Fixtures 10,000.00 9,000.00
Total 325,000.00 299,000.00 MamShie Traders
Income Statement
TOTAL ASSETS 550,000.00 577,300.00 Year Ended December 31,2021
2021
Net Sales 500,000.00
Less: Cost of Sales
Average inv Beginning Inventory 75,000.00
(75,000+50,000)/2 = P62,500 Purchases 265,000.00
Cost of Goods available for Sale 340,000.00
Less: Ending Inventory 50,000.00
COST OF SALES 290,000.00
Gross Profit 210,000.00
 RATIO ANALYSIS
Mamshie Traders
Comparative Statement of Financial Position
As of December 31,2021
LIQUIDITY RATIOS
ASSETS
2020 2021
AGE OF INVENTORY
Current Assets
Cash 15,000.00 28,300.00 365/4.64x = 78 days
Accounts Receivable 135,000.00 200,000.00
Inventories 75,000.00 50,000.00
Total 225,000.00 278,300.00 INVENTORY TURN OVER
Non-Current Assets
Land 50,000.00 50,000.00 290,000/62,500 = 4.64 x
Building 55,000.00 50,000.00
Machinery 170,000.00 150,000.00
Office Equipment 40,000.00 40,000.00
Furnitures and Fixtures 10,000.00 9,000.00
Total 325,000.00 299,000.00 MamShie Traders
Income Statement
TOTAL ASSETS 550,000.00 577,300.00 Year Ended December 31,2021
2021
Net Sales 500,000.00
Less: Cost of Sales
Conclusion: Low Turnover, long number of Beginning Inventory 75,000.00
days to sell. Purchases 265,000.00
Cost of Goods available for Sale 340,000.00
Less: Ending Inventory 50,000.00
COST OF SALES 290,000.00
Gross Profit 210,000.00
 RATIO ANALYSIS
Mamshie Traders
Comparative Statement of Financial Position
As of December 31,2021
LIQUIDITY RATIOS
ASSETS

Current Assets
2020 2021
AR TURN OVER
Cash 15,000.00 28,300.00 Net Credit Sales/Average AR
Accounts Receivable 135,000.00 200,000.00
Inventories 75,000.00 50,000.00
Total 225,000.00 278,300.00
Non-Current Assets
Land 50,000.00 50,000.00
Building 55,000.00 50,000.00
Machinery 170,000.00 150,000.00
Office Equipment 40,000.00 40,000.00
Furnitures and Fixtures 10,000.00 9,000.00 MamShie Traders
Total 325,000.00 299,000.00 Income Statement
Year Ended December 31,2021
TOTAL ASSETS 550,000.00 577,300.00 2021
Net Sales 500,000.00
Less: Cost of Sales
Beginning Inventory 75,000.00
Purchases 265,000.00
Cost of Goods available for Sale 340,000.00
Less: Ending Inventory 50,000.00
COST OF SALES 290,000.00
Gross Profit 210,000.00
 RATIO ANALYSIS
Mamshie Traders
Comparative Statement of Financial Position
As of December 31,2021
LIQUIDITY RATIOS
ASSETS
2020 2021 AR TURN OVER
Current Assets
Cash 15,000.00 28,300.00 500,000/167,500=2.99X
Accounts Receivable 135,000.00 200,000.00
Inventories 75,000.00 50,000.00
Total 225,000.00 278,300.00
AGE OF AR
Non-Current Assets
Land 50,000.00 50,000.00 365/2.99= 120 days
Building 55,000.00 50,000.00
Machinery 170,000.00 150,000.00
Office Equipment 40,000.00 40,000.00
Furnitures and Fixtures 10,000.00 9,000.00 MamShie Traders
Total 325,000.00 299,000.00 Income Statement
Year Ended December 31,2021
TOTAL ASSETS 550,000.00 577,300.00 2021
Net Sales 500,000.00
Less: Cost of Sales
Beginning Inventory 75,000.00
Average AR Purchases 265,000.00
(135,000+200,000)/2 = P167,500 Cost of Goods available for Sale 340,000.00
Less: Ending Inventory 50,000.00
COST OF SALES 290,000.00
Gross Profit 210,000.00
 RATIO ANALYSIS
Mamshie Traders
Comparative Statement of Financial Position
As of December 31,2021
LIQUIDITY RATIOS
ASSETS
2020 2021 AR TURN OVER
Current Assets
Cash 15,000.00 28,300.00 500,000/167,500=2.99X
Accounts Receivable 135,000.00 200,000.00
Inventories 75,000.00 50,000.00
Total 225,000.00 278,300.00
AGE OF AR
Non-Current Assets
Land 50,000.00 50,000.00 365/2.99= 120 days
Building 55,000.00 50,000.00
Machinery 170,000.00 150,000.00
Office Equipment 40,000.00 40,000.00
Furnitures and Fixtures 10,000.00 9,000.00 MamShie Traders
Total 325,000.00 299,000.00 Income Statement
Year Ended December 31,2021
TOTAL ASSETS 550,000.00 577,300.00 2021
Net Sales 500,000.00
Less: Cost of Sales

Conclusion: Collection of Beginning Inventory

Purchases
75,000.00
265,000.00
receivables is too slow Cost of Goods available for Sale 340,000.00
Less: Ending Inventory 50,000.00
COST OF SALES 290,000.00
Gross Profit 210,000.00
MamShie Traders
RATIO ANALYSIS
Income Statement
Year Ended December 31,2021
2021
PROFITABILITY
Net Sales 500,000.00
Less: Cost of Sales Ability to earn adequate profits or high rate
Beginning Inventory 75,000.00 of return
Purchases 265,000.00
Cost of Goods available for Sale 340,000.00 GP BASED ON SALES
Less: Ending Inventory 50,000.00
Gross profit
COST OF SALES 290,000.00
Gross Profit 210,000.00
Net Sales
Less: Operating Expenses
Selling Expenses 40,000.00 RETURN ON SALES
Impairment loss 10,000.00 Net profit/Net Sales
Administrative Expenses 35,000.00
Depreciation Expense 25,000.00
RETURN ON ASSETS
Total Operating Expenses 110,000.00 Net profit/Ave. Total Assets
Net Operating Income 100,000.00
RETURN ON EQUITY
Less: Interest Expense 25,000.00
NET PROFIT 75,000.00 Net Profit/Ave Owner’s Equity
MamShie Traders
RATIO ANALYSIS
Income Statement
Year Ended December 31,2021
2021
PROFITABILITY
Net Sales 500,000.00
Less: Cost of Sales Ability to earn adequate profits or high rate
Beginning Inventory 75,000.00 of return
Purchases 265,000.00
Cost of Goods available for Sale 340,000.00 GP BASED ON SALES
Less: Ending Inventory 50,000.00
210,000/500,000 = 42%
COST OF SALES 290,000.00
Gross Profit 210,000.00
Less: Operating Expenses
Selling Expenses 40,000.00
Impairment loss 10,000.00
Administrative Expenses 35,000.00
Depreciation Expense 25,000.00
Total Operating Expenses 110,000.00
Net Operating Income 100,000.00
Less: Interest Expense 25,000.00
NET PROFIT 75,000.00
MamShie Traders
RATIO ANALYSIS
Income Statement
Year Ended December 31,2021
2021
PROFITABILITY
Net Sales 500,000.00
Less: Cost of Sales Ability to earn adequate profits or high rate
Beginning Inventory 75,000.00 of return
Purchases 265,000.00
Cost of Goods available for Sale 340,000.00 GP BASED ON SALES
Less: Ending Inventory 50,000.00
210,000/500,000 = 42%
COST OF SALES 290,000.00
Gross Profit
Less: Operating Expenses
210,000.00 RETURN ON SALES
Selling Expenses 40,000.00 Net profit/Net Sales
Impairment loss 10,000.00
Administrative Expenses 35,000.00
Depreciation Expense 25,000.00
Total Operating Expenses 110,000.00
Net Operating Income 100,000.00
Less: Interest Expense 25,000.00
NET PROFIT 75,000.00
MamShie Traders
RATIO ANALYSIS
Income Statement
Year Ended December 31,2021
2021
PROFITABILITY
Net Sales 500,000.00
Less: Cost of Sales Ability to earn adequate profits or high rate
Beginning Inventory 75,000.00 of return
Purchases 265,000.00
Cost of Goods available for Sale 340,000.00 GP BASED ON SALES
Less: Ending Inventory 50,000.00
210,000/500,000 = 42%
COST OF SALES 290,000.00
Gross Profit 210,000.00
Less: Operating Expenses RETURN ON SALES
Selling Expenses 40,000.00 75,000/500,000= 15%
Impairment loss 10,000.00
Administrative Expenses 35,000.00
Depreciation Expense 25,000.00
Total Operating Expenses 110,000.00
Net Operating Income 100,000.00
Less: Interest Expense 25,000.00
NET PROFIT 75,000.00
MamShie Traders
RATIO ANALYSIS
Income Statement
Year Ended December 31,2021
2021
PROFITABILITY
Net Sales 500,000.00
Less: Cost of Sales Ability to earn adequate profits or high rate
Beginning Inventory 75,000.00 of return
Purchases 265,000.00
Cost of Goods available for Sale 340,000.00 GP BASED ON SALES
Less: Ending Inventory 50,000.00
210,000/500,000 = 42%
COST OF SALES 290,000.00
Gross Profit 210,000.00
Less: Operating Expenses
RETURN ON SALES
Selling Expenses 40,000.00 75,000/500,000= 15%
Impairment loss 10,000.00
Administrative Expenses 35,000.00
Depreciation Expense 25,000.00
Total Operating Expenses 110,000.00
Net Operating Income 100,000.00
Less: Interest Expense 25,000.00
NET PROFIT 75,000.00
MamShie Traders
RATIO ANALYSIS
Income Statement
Year Ended December 31,2021
2021
PROFITABILITY
Net Sales 500,000.00
Less: Cost of Sales Ability to earn adequate profits or high rate
Beginning Inventory 75,000.00 of return
Purchases 265,000.00
Cost of Goods available for Sale 340,000.00 GP BASED ON SALES
Less: Ending Inventory 50,000.00
210,000/500,000 = 42%
COST OF SALES 290,000.00
Gross Profit 210,000.00
Less: Operating Expenses
RETURN ON SALES
Selling Expenses 40,000.00 75,000/500,000= 15%
Impairment loss 10,000.00
Administrative Expenses 35,000.00
RETURN ON ASSETS
Depreciation Expense 25,000.00 Net profit/Ave. Total Assets
Total Operating Expenses 110,000.00
Net Operating Income 100,000.00
Less: Interest Expense 25,000.00
NET PROFIT 75,000.00
MamShie Traders
RATIO ANALYSIS
Income Statement
Year Ended December 31,2021
2021
PROFITABILITY
Net Sales 500,000.00
Less: Cost of Sales Ability to earn adequate profits or high rate
Beginning Inventory 75,000.00 of return
Purchases 265,000.00
Cost of Goods available for Sale 340,000.00 GP BASED ON SALES
Less: Ending Inventory 50,000.00
210,000/500,000 = 42%
COST OF SALES 290,000.00
Gross Profit 210,000.00
Less: Operating Expenses
RETURN ON SALES
Selling Expenses 40,000.00 75,000/500,000= 15%
Impairment loss 10,000.00
Administrative Expenses 35,000.00
RETURN ON ASSETS
Depreciation Expense 25,000.00 75,000/Ave. Total Assets
Total Operating Expenses 110,000.00
Net Operating Income 100,000.00
Less: Interest Expense 25,000.00
NET PROFIT 75,000.00
 RATIO ANALYSIS
PROFITABILITY
Mamshie Traders
Comparative Statement of Financial Position
As of December 31,2021 Ability to earn adequate profits or high rate
of return
ASSETS
2020 2021
Current Assets GP BASED ON SALES
Cash 15,000.00 28,300.00
Accounts Receivable 135,000.00 200,000.00 210,000/500,000 = 42%
Inventories 75,000.00 50,000.00
Total 225,000.00 278,300.00
Non-Current Assets
RETURN ON SALES
Land 50,000.00 50,000.00
Building 55,000.00 50,000.00
75,000/500,000= 15%
Machinery 170,000.00 150,000.00
Office Equipment 40,000.00 40,000.00 RETURN ON ASSETS
Furnitures and Fixtures 10,000.00 9,000.00
Total 325,000.00 299,000.00 75,000/563,650=13%
TOTAL ASSETS 550,000.00 577,300.00
MamShie Traders
RATIO ANALYSIS
Income Statement
Year Ended December 31,2021
2021
PROFITABILITY
Net Sales 500,000.00
Less: Cost of Sales Ability to earn adequate profits or high rate
Beginning Inventory 75,000.00 of return
Purchases 265,000.00
Cost of Goods available for Sale 340,000.00 GP BASED ON SALES
Less: Ending Inventory 50,000.00
210,000/500,000 = 42%
COST OF SALES 290,000.00
Gross Profit 210,000.00
Less: Operating Expenses
RETURN ON SALES
Selling Expenses 40,000.00 75,000/500,000= 15%
Impairment loss 10,000.00
Administrative Expenses 35,000.00
RETURN ON ASSETS
Depreciation Expense 25,000.00 75,000/563,650=13%
Total Operating Expenses 110,000.00
RETURN ON EQUITY
Net Operating Income 100,000.00
Less: Interest Expense 25,000.00 Net Profit/Ave Owner’s Equity
NET PROFIT 75,000.00
MamShie Traders
RATIO ANALYSIS
Income Statement
Year Ended December 31,2021
2021
PROFITABILITY
Net Sales 500,000.00
Less: Cost of Sales Ability to earn adequate profits or high rate
Beginning Inventory 75,000.00 of return
Purchases 265,000.00
Cost of Goods available for Sale 340,000.00 GP BASED ON SALES
Less: Ending Inventory 50,000.00
210,000/500,000 = 42%
COST OF SALES 290,000.00
Gross Profit 210,000.00
Less: Operating Expenses
RETURN ON SALES
Selling Expenses 40,000.00 75,000/500,000= 15%
Impairment loss 10,000.00
Administrative Expenses 35,000.00
RETURN ON ASSETS
Depreciation Expense 25,000.00 75,000/563,650=13%
Total Operating Expenses 110,000.00
RETURN ON EQUITY
Net Operating Income 100,000.00
Less: Interest Expense 25,000.00 75,000/Ave Owner’s Equity
NET PROFIT 75,000.00
Mamshie Traders
RATIO ANALYSIS
Comparative Statement of Financial Position
As of December 31,2021
PROFITABILITY
ASSETS
2020 2021
Current Assets Conclusion: The company is quite profitable and can generate
Cash 15,000.00 28,300.00 income from use of their assets and invested capital.
Accounts Receivable 135,000.00 200,000.00
Inventories 75,000.00 50,000.00
Total 225,000.00 278,300.00
Non-Current Assets
Land 50,000.00 50,000.00
Building 55,000.00 50,000.00 GP BASED ON SALES
Machinery 170,000.00 150,000.00
Office Equipment 40,000.00 40,000.00 210,000/500,000 = 42%
Furnitures and Fixtures 10,000.00 9,000.00
Total 325,000.00 299,000.00

TOTAL ASSETS 550,000.00 577,300.00

RETURN ON SALES
LIABILITIES
Current Liabilities 75,000/500,000= 15%
Notes payable 10,000.00 15,000.00
Accounts Payable 61,000.00 79,000.00
Accrued Expenses 4,000.00 6,000.00 RETURN ON ASSETS
Total 75,000.00 100,000.00
Non-Current Liabilities 75,000/563,650=13%
Long-term Notes payable 250,000.00 225,000.00
TOTAL LIABILITIES 325,000.00 325,000.00
OWNER'S EQUITY RETURN ON EQUITY
Mamshie, Capital 225,000.00 252,300.00
TOTAL LIABILITIES AND
OWNER'S EQUITY 550,000.00 577,300.00
75,000/238,625= 31%
 RATIO ANALYSIS ASSETS
2021
Current Assets

STABILITY Cash
Accounts Receivable
28,300.00
200,000.00
Inventories 50,000.00
Total 278,300.00
Ability to pay principal on long term Non-Current Assets
liabilities Land 50,000.00
Building 50,000.00
Machinery 150,000.00
DEBT UTILIZATION RATIO Office Equipment 40,000.00
Furnitures and Fixtures 9,000.00
TOTAL LIAB/TOTAL ASSETS Total 299,000.00

TOTAL ASSETS 577,300.00

LIABILITIES
EQUITY RATIO Current Liabilities
Notes payable 15,000.00
OWNER’S EQUITY/TOTAL ASSETS Accounts Payable 79,000.00
Accrued Expenses 6,000.00
Total 100,000.00
DEBT-EQUITY RATIO Non-Current Liabilities
TOTAL LIAB/OWNER’S EQUITY Long-term Notes payable 225,000.00
OWNER'S EQUITY
Mamshie, Capital 252,300.00
TOTAL LIABILITIES AND OWNER'S
EQUITY 577,300.00
 RATIO ANALYSIS
ASSETS
2021
Current Assets

STABILITY
Cash 28,300.00
Accounts Receivable 200,000.00
Inventories 50,000.00
Total 278,300.00
Non-Current Assets
Land 50,000.00
Building 50,000.00
Machinery 150,000.00
Office Equipment 40,000.00
DEBT UTILIZATION RATIO Furnitures and Fixtures 9,000.00
Total 299,000.00
325,000/577,300 =56%
TOTAL ASSETS 577,300.00
LIABILITIES
Current Liabilities
Notes payable 15,000.00
Accounts Payable 79,000.00
Accrued Expenses 6,000.00
Total 100,000.00
Non-Current Liabilities
Long-term Notes payable 225,000.00
TOTAL LIABILITIES 325,000.00
OWNER'S EQUITY
Mamshie, Capital 252,300.00
TOTAL LIABILITIES AND OWNER'S
EQUITY 577,300.00
 RATIO ANALYSISASSETS
2021
Current Assets

STABILITY
Cash 28,300.00
Accounts Receivable 200,000.00
Inventories 50,000.00
Total 278,300.00
Non-Current Assets
Land 50,000.00
Building 50,000.00
Machinery 150,000.00
Office Equipment 40,000.00
DEBT UTILIZATION RATIO Furnitures and Fixtures 9,000.00
Total 299,000.00
325,000/577,300 =56%
TOTAL ASSETS 577,300.00
LIABILITIES
Current Liabilities
EQUITY RATIO Notes payable 15,000.00
Accounts Payable 79,000.00
OWNER’S EQUITY/TOTAL ASSETS Accrued Expenses 6,000.00
Total 100,000.00
Non-Current Liabilities
Long-term Notes payable 225,000.00
TOTAL LIABILITIES 325,000.00
OWNER'S EQUITY
Mamshie, Capital 252,300.00
TOTAL LIABILITIES AND OWNER'S
EQUITY 577,300.00
 RATIO ANALYSIS
ASSETS
2021
Current Assets

STABILITY
Cash 28,300.00
Accounts Receivable 200,000.00
Inventories 50,000.00
Total 278,300.00
Non-Current Assets
Land 50,000.00
Building 50,000.00
Machinery 150,000.00
Office Equipment 40,000.00
DEBT UTILIZATION RATIO Furnitures and Fixtures 9,000.00
Total 299,000.00
325,000/577,300 =56%
TOTAL ASSETS 577,300.00
LIABILITIES
Current Liabilities
EQUITY RATIO Notes payable 15,000.00
Accounts Payable 79,000.00
252,300/577,300 =44% Accrued Expenses 6,000.00
Total 100,000.00
Non-Current Liabilities
DEBT-EQUITY RATIO Long-term Notes payable 225,000.00
TOTAL LIABILITIES 325,000.00
TOTAL LIAB/OWNER’S EQUITY OWNER'S EQUITY
Mamshie, Capital 252,300.00
TOTAL LIABILITIES AND OWNER'S
EQUITY 577,300.00
 RATIO ANALYSIS ASSETS
2021
Current Assets

STABILITY
Cash 28,300.00
Accounts Receivable 200,000.00
Inventories 50,000.00
Total 278,300.00
Conclusion: Not stable because liabilities are Non-Current Assets
Land 50,000.00
more than capital. Building 50,000.00
Machinery 150,000.00
Office Equipment 40,000.00
DEBT UTILIZATION RATIO Furnitures and Fixtures 9,000.00
Total 299,000.00
325,000/577,300 =56%
TOTAL ASSETS 577,300.00
LIABILITIES
Current Liabilities
EQUITY RATIO Notes payable 15,000.00
Accounts Payable 79,000.00
252,300/577,300 =44% Accrued Expenses 6,000.00
Total 100,000.00
Non-Current Liabilities
DEBT-EQUITY RATIO Long-term Notes payable 225,000.00
TOTAL LIABILITIES 325,000.00
325,000/252,300 =1.29 OWNER'S EQUITY
Mamshie, Capital 252,300.00
TOTAL LIABILITIES AND OWNER'S
EQUITY 577,300.00
Thank you for
listening!
“SARANG HAE”