What are some methods used to compare the financial condition of a competing organization?© BrainMass Inc. brainmass.com October 25, 2018, 1:40 am ad1c9bdddf
It is important for an organization as well as the investor to analyze the financial condition of an organization. An organization utilizes different methods of comparing the financial condition of a competing organization, in order to enhance the effectiveness of its financial condition. In the financial condition the assets, liabilities and equity of a firm are assessed. The situation of these assets and liabilities are taken for a particular time period in order to compare the firm's own monetary condition.
There are various methods, which an organization may use to compare the financial condition, which are as described below:
Vertical analysis - The first method, ...
The solution provides explanation of three methods of analysis and one relevant financial ratio to be used when comparing the financial states of market competitors. 424 words with references.
Shows trends. Interprets the changes over 3 year period. Identifies the best performer and why? Includes reasoning and support with the data. Comments on the interaction of the balance sheet and income statement.
Compare the financial statements for Lowe's and Home Depot for 2010 and 2011 including:
- cost of good sold;
- accounts receivable; and
- accounts payable
Show trends for all five categories for each company. Keeping the case analysis in mind, discuss and interpret the changes over the three year period. Which company is the best performer and why? How is this information useful to you from a managerial perspective? Explain your reasoning and support with the numbers you have pulled out for the comparison above. Don't forget to comment on the interaction of the balance sheet and income statement.View Full Posting Details