sample article review on financial management


Financial Statement Analysis Methods: Horizontal vs. Vertical Analysis. Company A and company B have very similar as well as very different financial statements. They analyze financial data prepared by accountants, monitor the firm’s financial status, and prepare and implement financial plans. WowEssays. Sales = $ 514.633 million Horizontal Analysis. Read on for some things you need to know to prepare for such careers and remember that beneath the shine, there is also grime and hence, start the race with the wind behind you. "Financial Management Article Reviews Examples." Balance Sheet: Vertical Analysis Many economists have argued that profit maximization has brought about many disparities among consumers and manufacturers. Business, Commerce, Wealth, Finance, Investment, Taxes, Company, Equity. 2007. However, the gross profit has gone down marginally from 23.8% in the financial year ended 2010 to 22.0% in 2012. Financial management and accounting are pivotal in any organization since the success or failure of the organization depends on how the assets are managed within the organization (Accounting Schools Online, 2012) regardless of its nature whether it The formulae for both are as below: Lured by the glamour and glitz of finance? Now if we look into different ratios for company A, we can see that the profit margin for the company is very low but the ROE is better because of its equity multiplier (6.18). In vertical analysis generally a financial statement is compared with a base figure (Harvey, 2011). In addition, this article also discusses how bankers and financial professionals across the value chain and the hierarchy of the BFSI Pyramid use financial modeling to assess the soundness of the financial decisions. © Management Study Guide If the number is larger, it means that it is a better company for investment and vice versa. This article describes the dire economic situation at Eskom, which is a utility company in South Africa. Garden Place Case: Question 2: T-Account The cost of goods sold has gone up as a percentage of sales. Similarly, individual liabilities as shown in the balance sheet are also shown as percentage of total liabilities. Furthermore, the net income improved by almost 68.1% in 2012 than 2010. New York: Wiley. It means applying general management principles to financial resources of the enterprise. Viewed on 3rd January 2014 < http://www.accounting4management.com/vertical_analysis_full.htm>. Please note that we cannot guarantee that unsubstantiated claims will be satisfied. “The challenge of cultural misunderstanding of the firm and the investment that the financial manager has presented to the market could lead to the abrupt decline of sales or ban of the institution. Company B is very liquid as its cash and cash equivalent percentage have gone up substantially from 2010 to 2011 and its inventory has gone down. Generally the vertical analysis is done for a single period but to make it more useful many analysts do a multiple period vertical analysis. It’s a thorough evaluation of the text of an article. 2013. As we can see that it has a very low total liabilities percentage compared to total assets. Company B has a much superior balance sheet than company A. This may be because of the increase in price of raw materials, fuel cost or increase in labor cost. I'm fine with missing my deadline, WowEssays. Part II CiteScore values are based on citation counts in a range of four years (e.g. Financial Management Article Reviews Examples. Reduction in total liabilities is a good thing for the company mainly triggered by better cash management as Trade Account payable is reduced. This article provides an overview of one of the most important support functions in corporates which is the Finance Department and which touches the lives of the employees directly and indirectly. Equity Multiplier = 1.17 Does Financial Innovation Benefit the Society? 2020, https://www.wowessays.com/free-samples/financial-management-article-reviews-examples/. Check out our article review samples to gain a better understanding of how to review articles yourself. However, there are critics of simple ROE and they prefer much rigid measures to conclude that a company is in sound health. The capital structure involves decisions like Type of securities and ratio between securities, Capitalization comprises of share capital, debentures, loans, free reserves,etc. Functions of Financial Management: Financial manager is concerned with the following aspects: 1. Planning the financial strategies. In terms of liabilities, company A has more than 90% of its liabilities as current liabilities. The first theme focuses on the significant differences in management abilities and management styles across CEOs and top managers. article review of "financial management and accounting in state islamic religious councils in malaysia: a grounded theory" by abdul rahim 280578413, Well-researched, fact-checked, and accurate, Eloquently written and immaculately formatted. Aspiring for a Career in Finance? How to Compute Horizontal Analysis of a Balance Sheet. This shows that the company has a very healthy cash flow position. Available from: https://www.wowessays.com/free-samples/financial-management-article-reviews-examples/, "Financial Management Article Reviews Examples." Income statement for company B is interesting and even the trend has some interesting patterns. 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. Balance Sheet Company B has an interesting income statement. Total assets were almost unchanged for the company in the two years. We often hear the term financial intermediaries mentioned in various contexts. Delta Publishing Company. Retrieved December 09, 2020, from https://www.wowessays.com/free-samples/financial-management-article-reviews-examples/. Read More. By: Chris Messy Harris published on November 15, 2020. This article demystifies the arcane world of financial models and explains what it is, how it is useful, and the purpose it serves. One day they may be developing a better way to automate cash collections, and the next they may be analyzing a proposed acquisition. Jan, Irfanullah. 2014. Shareholders’ equity showed a slight increase owing to small increase in retained earnings. Just fill out the removal request form with all necessary details, such as page location and some verification of you being a true owner. This is conducted to know the current financial position of the business company. Both the companies are showing positive sales growth. Liabilities as percentage of total assets are low and that is a good indicator for company B. For conducting a vertical analysis of an income statement, the base is generally taken as the total sales figure (Bushman, 2007). Vertical Analysis is one of the most used financial analyses for the financial statements. There are numerous examples of … Accounting for Management. Capitalization represents permanent investment in companies excluding long-term loans. Viewed on 3rd January 2014 < http://www.ehow.com/how_5078843_compute-horizontal-analysis-balance-sheet.html> The second largest asset category is accounts receivable. ROE for company A = 4.961/43 = 0.113 Highly leveraged companies may show high ROE values but that does not mean that they are financially sound (Pinsent, 2013). This article aims to define and explain what financial intermediaries are and their role in the financial system. 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. The majority of the liabilities are from accounts payable and salaries and wages payable as expected. The review is also conducted in order for the management to be able control their budget cost for the production and projects that are carried out. Finn, Kaylee. Viewed on 3rd January 2014 2.1.8 Limitations of Using Financial Ratios 35 2.2 Review of Empirical Studies 37 CHAPTER III ORGANIZATIONAL PROFILE 40 3.1 ... 3.2.9 Company Management System 50 3.2.9.1 The General Assembly (Shareholders' Meeting) 50 3.2.9.2 External Auditors 50 3.2.9.3 The Functional Organizational Structure of AIB 51 3.2.9.4 The Board of Directors 51 3.2.9.5 The Executive Management 52 3.2.9.6 … It has been mentioned before that simple ROE calculation cannot account for leveragability of a company or asset utilizations. This helps in identifying the trend of certain financial statement figures over time. Read Our Example Of Article Review On Financial Management and other exceptional papers on every subject and topic college can throw at you. This article discusses these aspects as well as the management of the pension schemes, the tax deduction at source, payroll, claims processing and other activities of the finance function. Among all investors return on equity is one of the most monitored financial numbers. We can custom-write anything as well! "Financial Management Article Reviews Examples. This is the reason why the finance function is important. WowEssays, 05 Mar. Income Statement 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. Lastly, parameters to distinguish between good and bad financial innovation have also been mentioned. The denominator of the above formula goes down and the ROE value goes up. However, even upon growing at a higher pace company A’s profit has declined due to not being able to manage the input cost for production appropriately (cost of goods sold). Shareholders equity has not seen many changes as there were not much contribution from profit. The Finance section comprises eight members of staff including the Finance Manager, who reports to the Head of Finance and Asset Management. (1) Financial management: corporate finance, which deals with decisions relatedto how many and what types of assets a firm needs to acquire (investment decisions), how a firm should raise capital to purchase assets (financing decisions), and how a firm should do to maximize its shareholders wealth (goal of a firm) - the focus of this class The review recommends strengthening financial leadership within government by creating a new role – director general for spending and finance, which will combine the leadership of … Capital Structure is referred to as the ratio of different kinds of securities raised by a firm as long-term finance. Among the current assets 68-69% of the assets are inventory. While the degree of complexity of the content involved may vary with disciplines, the basic structure remains the same. Among the total assets, inventory remained stable at around 68-69% for the years 2010 and 2011. 2. What is the difference between vertical analysis and horizontal analysis?. Simple ROE is calculated as a ratio of net income and shareholders’ equity (Throp 2012). Common Size Income Statement Analysis- An Example. Sample Management Journal Article Review APA Style - detailed In 2010, the current liabilities were almost 98% of the total liabilities which reduced to 94% in 2011 due to conversion of some short term debts to long term instruments. On the other hand, all the three ratios for company B seem to be in good shape. Notes payable to banks remains the highest contributor to current liabilities. Profit margin is better than company A and the equity multiplier is 1.17 which is decent. Equity Multiplier = 6.186 DuPont analysis breaks down the simple formula into three components for ROE calculation (Pinsent, 2013). Viewed on 3rd January 2014 The cash in hand for company A has significantly increased from 0.7% in 2010 to 1.6% in 2011. Absolute Change = Amount of the item in comparison year – amount of the item in base year Let’s first take a look at the ROE of company A and B. 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, 2013). Business Finance. Type of paper: However, in case of horizontal analysis a base year is taken for comparison of figures. This shows that total assets as well as total liabilities have gone down for company A. If a company has a very strong Return on Equity (ROE) it shows that the management creates high value for the investors (Throp 2012). Looking at the assets, we can easily see that almost 96-97% of the total assets are current assets for company A. This means that the writer should analyze, compare, summarize, and classify the information presented in the text of the article. There are some tips here. Percentage Change = (absolute change / amount of the item in base year) * 100. Business News Daily, 2013. 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. 2013. [Accessed December 09, 2020]. The analogy of the Doctors arriving at the diagnosis and prognosis of the patient’s condition using the results of the tests, the past history, and the present condition is examined to provide readers with an understanding of how financial professionals recommend or reject key decisions. All the figures in other years are compared with the same figures of the base year. Free Essay Examples - WowEssays.com. We often hear the term financial intermediaries mentioned in various contexts. The stratified random sample was selected heterogeneity of the members of the research community, then distributed a questionnaire to 100 research community and was full retrieval. FREE ASSIGNMENT ESSAY SAMPLE AND EXAMPLE FOR MBA, LAW& NURSING STUDENTS . Sample of research paper (turabian format) Employee Assistance Program (EAP) is designed to assist employees and their family members with substance abuse, family problems or mental disorders. This may have been achieved due to better cash management practices and working capital management. The scope for improvement, by conducting the financial system s first take a at! Been provided in this article aims to define and explain what financial intermediaries mentioned in contexts. Information was missing so I made my own assumption about long term and term. Negative which contributed to the Head of Finance and asset management deal.. Understanding each Finance Function in detail the organisation, and will remain strictly confidential - this is the of! And 2011 - investment Decision, Dividend Decision and liquidity Decision covered only by cash in in! 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