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We oftenmake comparisons whwn talking about financial statement,look again at the statement of
earnings on page 15 and find the figures for the items below,which sentence (a-h) can be used to describe and
2.Interest and financial charges (B) b. Its gone down since last year
3.Basic earnings per share (2005-2006) (H) c. There’s quite a drop from (2005 to 2006)
4.Earnings before income taxes and accounting changes (E) d. It’s not as a low as two years ago
8. Some other common rations are given below.Match ratios with the formulas (1-7) and the descriptions
(a-g).
Return on equity
Average
Interest rate
Debt/equity ratio
Inventory turnover
Price/earnings ratio
1 interest expenses (ans : Average interest rate)
Avarage share
Shareholders equity
Shareholders equity
revenue
Average inventory
a) Give’s the company’s pricing policy and mark up margins.An adequate gross margin allows a company to
b) Determines the avarege interest rate at which a company borrows funds. => Average interest rate
c) Compares the curent market price with earnings to calculate if a stock is over or under valued.used as a
d) Indicates the return a company gets on yhe owners inverstment.Companies that make high return often do
f) Indicates what proportion of equity and debt an enterprise uses to finance its assets.A more stringent test is
g) Calculate the profitmade on a per share basis.This quoted by U.S publicly held companies in their financial
9. Use Words from the description above to complete the table.The first one is done for you.
VERB NOUN
To predict Prediction
To pay Payment
To compare Comparison
To calculate Calculation
To indicate Indication
To expand Expansion
To perform Performance
Now use verb or nouns from above to complete the sentence .You may need to change the form.
b. The problems in the middle east have made it really difficult to PREDICT next year turmover
10,Here are some phares the accountant use during the meeting in excersice 7,can ypu fill in the missing
words ?
1. Norma has asked me to go over some of the ratio i used in the report
2. Everyone got it ?
4. Is that clear ?