tailieunhanh - Ebook Financial and managerial accounting (16th edition): Part 2

(BQ) Part 2 book "Financial and managerial accounting" has contents: Financial statement analysis, global business and accounting, process costing, standard cost systems, operational budgeting, responsibility accounting and transfer pricing, capital budgeting, rewarding business performance. | Confirming Pages CHA P T E R 14 © BananaStock/PictureQuest/DAL Financial Statement Analysis AFTER STUDYING THIS CHAPTER, YOU SHOULD BE ABLE TO: E Explain the uses of dollar and percentage changes, trend percentages, component percentages, a and ratios. LO2 Learning Objective LO1 Discuss the quality of a company’s earnings, assets, and working capital. LO3 E Explain the nature and purpose of classifications in financial statements. LO4 P Prepare a classified balance sheet and compute widely used measures of liquidity a and credit risk. LO5 P Prepare a multiple-step and a single-step income statement and compute widely used measures o of profitability. LO6 P Put a company’s net income into perspective by relating it to sales, assets, and stockholders’ e equity. LO7 C Compute the ratios widely used in financial statement analysis and explain the significance o of each. LO8 A Analyze financial statements from the viewpoints of common stockholders, creditors, a and others. 620 11/10/10 12:51 PM Confirming Pages JOHNSON & JOHNSON Johnson & Johnson is the world’s most comprehensive and broadly based manufacturer of health care products and related services. In 2009 it had over $50 billion in sales. Other measures of Johnson & Johnson’s size include the facts that it has over $94 billion in assets and conducts business in virtually all countries of the world. How does one get a handle on the financial performance of a huge company such as Johnson & Johnson? Financial statements, including the balance sheet, income statement, and statement of cash flows, provide a wealth of information that is helpful in performing this significant task. Financial statement analysis involves taking key items from these financial statements and gleaning as much useful information as possible from them. For example, we can determine that the amount of Johnson & Johnson’s 2009 net income ($12,266 million) represented a return of .