Common-size balance sheet and income statement, Financial Management

Assignment Help:

The question to be answered is : "Since the 1990 opening of stock exchanges, China started to use financial statements to determine the performance of listed companies. What were company C's performance from 2002 to 2004 and the quality of reported earnings?"

Need a detailed analysis including ratio and trend analysis. The ratio chosen must obviously relate to the trends observed - I don't need a full analysis with all the ratio, just the ones you think are relevant to what you can see from the statements. The entire analysis also needs to be done in the context of the article attached.

In terms of the part of the question that ask about the quality of reported earnings, I think that it has to do with the fact that the company applied aging method for its accounts receivable throughout 2002 and 2004, but in year 2004, it set aside Rmb2,597m as a special bad debt allowance. Because there aren't any notes attached regarding their accounting policies/ definitions etc...

Q1:  Common-size balance sheet and common-size income statement

Q2:  The change of accounting policy for accounts receivable, with a focus on 2002 through 2004 Apex.

Aging Groups

Rate

Amount

Allowance

 

 

Within 1 Y

0%

1223

0

0

0

1-2Y

10%

3520

2567

352

0.7

2-3Y

30%

34

32

10.2

0.9

3-4Y

50%

3

2

1.5

1.5

4-5Y

80%

 

 

0

0

Over 5Y

100%

5

5

5

5

Total

 

4785

2605

368.7

8.1

Net A/R

 

2180

 

4416.3

 

Schipper (1989) de?nes earnings management as a "purposeful intervention in the external ?nancial reporting process, with the intent of obtaining some private gain (as opposed to say, merely facilitating the neutral operation of the process)".

Earnings management can be defined as the adjustment of a firms' reported economic performance by insiders either to mislead some stakeholders or to influence contractual outcomes.

 


Related Discussions:- Common-size balance sheet and income statement

How to select the source of the finance, Selecting the source of the financ...

Selecting the source of the finance: after prepare of the capital structure an appropriate source of the funds. Various sources of the finance may be raised include share capital

Explain the post-acquisition integration plan, Explain the Post-acquisition...

Explain the Post-acquisition integration plan Post-acquisition integration plan Keep  all  channels  of communications open,  by  includin

Activity-based costing - abc, An accounting technique that identifies the a...

An accounting technique that identifies the activities that a firm does, and then allocates indirect costs to products. An activity based costing (ABC) system finds the relationshi

Accrual bond, It is a bond that does not give periodic interest payments. I...

It is a bond that does not give periodic interest payments. In spite of that, interest is added to the principal balance of the bond and is either paid at maturity or, at some poin

Explain the cost of capital across countries, Question 1 Cost of capita...

Question 1 Cost of capital is the minimum rate of return required by a firm on its investment in order to provide the rate of return by its suppliers of capital. Explain the co

Explain what is comprehensive income, Q. Explain what is Comprehensive Inco...

Q. Explain what is Comprehensive Income? Comprehensive Income - Change in EQUITY of a business enterprise during a period from transactions and other circumstances and events f

Define the common pattern of cash flows, What is the common pattern of cash...

What is the common pattern of cash flows for a share of preferred stock? How does the market define the value of a share of preferred stock, specified these promised cash flows?

Leverage, evaluate the importance of leverage in financial management of a ...

evaluate the importance of leverage in financial management of a small scale company

Ledge ac count, Ask question #Minimum 100 words accepted

Ask question #Minimum 100 words accepted

Monte-carlo simulation, Monte-Carlo Simulation Let us, for a shortwhil...

Monte-Carlo Simulation Let us, for a shortwhile, leave the illustration for determining the price and consider a simpler illustration for understanding the Monte-Carlo method

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd