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Tiếng anh chuyên ngành kế toán bài 4
Unit 4: Financial analysis FINANCIAL ANALYSIS In this unit, we will learn language and knowledge related to main types of financial analysis, the main characters of each type and some ratios in analyzing financial statements Trong học này, học ngôn ngữ kiến thức liên quan tới phương thức phân tích tài chính, đặc điểm loại số phân tích báo cáo tài UNIT OBJECTIVES - MỤC TIÊU • Provide students with the language and knowledge related to the work of financial analysis Cung cấp cho sinh viên vốn ngôn ngữ kiến thức liên quan đến cơng việc phân tích tài • Provide students with the language and method to write a classification essay Cung cấp cho học viên ngôn ngữ phương pháp để viết luận phân loại • At the end of this unit, students will be able to tell and write about main types of financial analysis, the main characters of each type and some ratios in analyzing financial statements Sau kết thúc học này, sinh viên nói viết cách phân tích tài bản, đặc điểm loại số số phân tích báo cáo tài DURATION (9 periods) - THỜI LƯỢNG HỌC (9 TIẾT) 47 Unit 4: Financial analysis Match the terms or concepts in column A with their definitions in column B The suggested time to this exercise is 10 minutes Column A Column B Business cycle A A detailed examination or report on financial performance Financial instrument B The difference between the price of goods paid by a shopkeeper and the price paid by the customer Financial statement analysis C An amount of money received from sales of goods minus the cost of manufacturing or buying them Gross margin D The examination of two or more organizations that produce similar goods or carry out the same stage of the production process Gross profit E Any stock, share, money, or other financial security Horizontal analysis F Recurring fluctuations in economic activity consisting of recession and recovery and growth and decline Liquidity Liquidity ratio G Having enough money to pay your debts; having an excess of assets over liabilities Net sales revenue H The examination based on the relationship between two amounts determined by the number of times one contains the other Ratio analysis I The examination of a movement in a certain direction 10 Solvency Solvency ratio J Finance of assets that are easily turned into cash the relationship between the amount of money held in cash and the total amount held in deposits and investments Trend analysis K The amount of money made from the sale of goods minus the cost of producing, selling and distributing them L The examination of two or more organizations that deal with different stages in a production process 11 12 Vertical analysis 48 Unit 4: Financial analysis Text A: Read the text exercise 2.1 and 2.2 below The suggested time for reading the text and completing the exercise is 30 minutes FINANCIAL ANALYSIS Financial analysis F inancial statement analysis is the process of examining relationships among financial statement elements and making comparisons with relevant information It is a valuable tool used by investors and creditors, financial analysts, and others in their decision-making rocesses related to stocks, bonds, and other financial instruments The goal in analyzing financial statements is to assess past performance and current financial position and to make predictions about the future performance of a company Investors who buy stock are primarily interested in a company's profitability and their prospects for earning a return on their investment by receiving dividends and/or increasing the market value of their stock holdings Creditors and investors who buy debt securities, such as bonds, are more interested in liquidity and solvency: the company's short-and long-run ability to pay its debts Financial analysts, who frequently specialize in following certain industries, routinely assess the profitability, liquidity, and solvency of companies in order to make recommendations about the purchase or sale of securities, analyst may prefer to use a such as stocks and bonds variation of horizontal analysis Analysts can obtain useful called trend analysis Trend information by comparing a analysis involves calculating company's most recent financial each year's financial statement statements with its results in balances as percentages of the previous years and with the first year, also known as the results of other companies in base year When expressed the same industry Three primary as percentages, the base year types of financial statement figures are always 100 percent, analysis are commonly known and percentage changes from as horizontal analysis, vertical the base year can be determined analysis, and ratio analysis Vertical Analysis W Horizontal Analysis W hen an analyst compares financial information for two or more years for a single company, the process is referred to as horizontal analysis, since the analyst is reading across the page to compare any single line item, such as sales revenues In addition to comparing dollar amounts, the analyst computes percentage changes from year to year for all financial statement balances, such as cash and inventory Alternatively, in comparing financial statements for a number of years, the hen using vertical analysis, the analyst calculates each item on a single financial statement as a percentage of a total The term vertical analysis applies because each year's figures are listed vertically on a financial statement The total used by the analyst on the income statement is net sales revenue, while on the balance sheet it is total assets This approach to financial statement analysis, also known as component percentages, produces common-size financial statements Common-size balance sheets and income statements can be more easily compared, whether across the years for a single company or across different companies 49 Unit 4: Financial analysis Ratio Analysis R atio analysis enables the analyst to compare items on a single financial statement or to examine the relationships between items on two financial statements After calculating ratios for each year's financial data, the analyst can then examine trends for the company across years Since ratios adjust for size, using this analytical tool facilitates intercompany as well as intracompany comparisons Ratios are often classified using the following terms: profitability ratios (also known as operating ratios), liquidity ratios, and solvency ratios Profitability ratios are gauge of the company's operating success for a given period of time Liquidity ratios are measures of the short-term ability of the company to pay its debts when they come due and to meet unexpected needs for cash Solvency ratios indicate the ability of the company to meet its long-term obligations on a continuing basis and thus to survive over a long period of time In judging how well on a company is doing, analysts typically compare a company's ratios to industry statistics as well as to its own past performance Financial statement analysis, when used carefully, can produce meaningful insights about a company's financial information and its prospects for the future However, the analyst must be aware of certain important considerations about financial statements and the use of these analytical tools For example, the dollar amounts for many types of assets and other financial statement items are usually based on historical costs and thus not reflect replacement costs or inflationary adjustments Furthermore, financial statements contain estimates of numerous items, such as warranty expenses and uncollectible customer balances The meaning fulness of ratios and percentages depends on how well the financial statement amounts depict the company's situation Comparisons to industry statistics or competitors' results can be complicated because companies may select different, although equally acceptable, methods of accounting for inventories and other items Making meaningful comparisons is also hampered when a company or its competitors have widely diversified operations he tools of financial statement analysis, ratio and percentage calculations, are relatively easy to apply Understanding the content of the financial statements, on the other hand, is not a simple task Evaluating a company's financial status, performance, and prospects using analytical tools requires skillful application of the analyst's judgment T Source: Text A: From Financial Statement Analysis, MARY BRADY GREENAWALT, http://www.answers.com/ 2.1 According to the text, which of the following sentences are true (T) or false (F) Questions The purpose of analyzing the financial statements is only to make prediction about the future performance of a company Financial analysts often specialize in assessing the performance of many different industries at the same time Trend analysis assesses the performance of a company in a year based on the comparison between the figures of that year to that of the base year It is more difficult to compare common-size balance sheets and income sheets either across the years or across different companies Liquidity ratios are measures of the company’s ability to pay its debts in a short term 50 T/F Unit 4: Financial analysis 2.2 Answer the following questions with your own words, based on the information in the text What is the importance of financial statement analysis? …………… … What is the purpose of analyzing financial statements? …………… … What the financial analysts do? …………… … How can financial analysts get useful information to make financial statements? …………… … Why is it called Horizontal Analysis? …………… … What is the character of ratio analysis? …………… … In ratio analysis, how can analysts judge on the performance of a company? …………… … Text B: Read the text and exercise 2.3 and, 2.4 The suggested time for reading the text and completing the exercises is 30 minutes FINANCIAL RATIO ANALYSIS F inancial ratio analysis is the calculation and comparison of ratios which are derived from the information in a company's financial statements The level and historical trends of these ratios can be used to make inferences about a company's financial condition, its operations and attractiveness as an investment F inancial ratios are calculated from one or more pieces of information from a company's financial statements For example, the "gross margin" is the gross profit from operations divided by the total sales or revenues of a company, expressed in percentage terms In isolation, a financial ratio is a useless piece of information In context, however, a financial ratio can give a financial analyst an excellent picture of a company's situation and the trends that are developing A ratio gains utility by comparison to other data and standards Taking our example, a gross profit margin for a company of 25% is meaningless by itself If we know that this company's competitors have profit margins of 10%, we know that it is more profitable than its industry peers which are quite favourable If we also know that the historical trend is upwards, for example has been increasing steadily for the last few years, this would also be a favourable sign that management is implementing effective business policies and strategies 51 Unit 4: Financial analysis F inancial ratio analysis groups the ratios into categories that tell us about different facets of a company's finances and operations An overview of some of the categories of ratios is given below • Leverage Ratios which show the extent that debt is used in a company's capital structure • Liquidity Ratios which give a picture of a company's short term financial situation or solvency • Operational Ratios which use turnover measures to show how efficient a company is in its operations and use of assets • Profitability Ratios which use margin analysis and show the return on sales and capital employed • Solvency Ratios which give a picture of a company's ability to generate cash flow and pay it financial obligations I t is imperative to note the importance of the proper context for ratio analysis Like computer programming, financial ratio is governed by the GIGO law of "Garbage In Garbage Out!" A cross industry comparison of the leverage of stable utility companies and cyclical mining companies would be worse than useless Examining a cyclical company's profitability ratios over less than a full commodity or business cycle would fail to give an accurate long-term measure of profitability Using historical data independent of fundamental changes in a company's situation or prospects would predict very little about future trends For example, the historical ratios of a company that has undergone a merger or had a substantive change in its technology or market position would tell very little about the prospects for this company C redit analysts, those interpreting the financial ratios from the prospects of a lender, focus on the "downside" risk since they gain none of the upside from an improvement in operations They pay great attention to liquidity and leverage ratios to ascertain a company's financial risk Equity analysts look more to the operational and profitability ratios, to determine the future profits that will accrue to the shareholder A lthough financial ratio analysis is well-developed and the actual ratios are well-known, practicing financial analysts often develop their own measures for particular industries and even individual companies Analysts will often differ drastically in their conclusions from the same ratio analysis Source: From Financial Ratio Analysis, http://www.finpipe.com/equity/finratan.htm 2.3 Answer the following questions by choosing the best choice What does the phrase “in isolation” mean? a in particular b individually c.in general What does the phrase “in context” mean? a in combination 52 b in general c in all Unit 4: Financial analysis What can be inferred from the example of the gross profit margin? a the ratios are especially useful by comparison to others b the ratios themselves can show a company’s financial performance c there’s no need to look at the historical trend when analyzing the ratios What does the word “itself” in the sentence: “Taking our example, a gross profit margin for a company of 25% is meaningless by itself” refer to? a a company b a gross profit margin c 25% What’s the INCORRECT statement? a Historical data and fundamental changes should be used independently b Credit analysts pay attention to liquidity and leverage ratios most of all c Equity analysts are interested in the operational and profitability ratios 2.4 Fill in the blanks with the words given below average compare enables indications industry problems similar successive them trends Ratio Analysis (1) _ the business owner/manager to spot trends in a business and to (2) _ its performance and condition with the (3) _ performance of similar businesses in the same (4) _ To this, compare your ratios with the average of businesses (5) _ to yours and compare your own ratios for several (6) _ years, watching especially for any unfavorable (7) _ that may be starting Ratio analysis may provide the all-important early warning (8) _ that allow you to solve your business (9) _ before your business is destroyed by (10) _ 3.1 Listening Listen to a lecture about the financial ratio analysis and answer the following questions What does ratio analysis provide? …… ……… How is horizontal analysis used? …… ……… What about vertical analysis? …… ……… What does “it” in this sentence: “It indicates the existing relationship between sales and each income statement account” refer to? a the horizontal analysis b the vertical analysis c the structure of the firm What are the two types of comparison in financial ratio analysis? …… ……… What will the firm’s financial analyst after completing the financial statement analysis? …… ……… 53 Unit 4: Financial analysis 2.3 Listening Listen to the lecture again and fill in the blanks Industry comparison The ratios of a firm are compared with those of (1) _ firms or with industry (2) or norms to (3) _ how the company is faring relative to its (4) _ Industry average ratios are (5) _ from a number of (6) _, including: (a) Dun & Bradstreet Dun & Bradstreet computes 14 ratios for each of 125 (7) _ They are published in Dun's Review and Key Business Ratios (b) Robert Morris Associates This association of bank loan officers (8) _ Annual Statement Studies Sixteen ratios (9) for more than 300 lines of business, as well as a (10) _distribution of items on the (11) and (12) _ (common size financial statements) Trend analysis A firm's present ratio is compared with its (13) and expected (14) _ ratios to determine whether the company's (15) is improving or deteriorating over time After completing the financial statement analysis, the firm's financial analyst will consult with management to discuss plans and prospects, any problem areas identified in the analysis, and possible solutions 4.1 Match the terms or expressions in column A with their definitions in column B The suggested time to this exercise is minutes Column A Column B The current ratio (or working capital) measures liquidity – i.e having enough cash to meet short-term obligations It shows if a business can pay its most urgent debts A A company’s profit margin or return on sales is the percentage difference between sales income and the cost of sales B Productivity shows the amount of work or sales per employee C Sales volume Number (or wages) of employees (long-term) loan capital Shareholders’ equity or net assets Current assets _ Current liabilities Earnings per share relates the company’s profits to the number of ordinary shares it has issued D A company’s debt/ equity ratio compares the amount of debt to the firm’s own capital E Pre-tax profit _ F Owners’ equity Pre-tax profit _ Return on equity shows profit compared to shareholders’ capital Distributable profit _ Number of shares Sales 54 Unit 4: Financial analysis 4.2 Choose the best alternative to complete each sentence The suggested time to this exercise is 10 minutes A company needs to raise a lot of money, it may ……… shares a put up b issue c supply d purchase Pension ……… play an important role in the stock market a companies b trusts c societies d persuaded As an ordinary shareholder, you are ……… to vote at the meeting a entitled b titled c nominated d persuaded The share ……… , which is made up of a cross-section of shares, reflects the general activity of the market a indication b index c measure d indicator A …… … is someone who buys shares, expecting the market to rise a bear b bull c dog d stag A …… … is a speculator who expects share prices to fall a bear b bull c dog d stag A …… … is a person who buys new issues of shares hoping to sell them quickly at a profit a bear b bull c dog d stag I’ve put part of the money into an instant ……… account a access b excess c exit d entrance Bonds issued by the government are often known as ……… a gelts b guilt’s c gilts d debits 10 What kind of ……… can I expect on my investment? a reward b prize c surplus d return 11 You should have as diversified a ……… of shares as possible a case b file c portfolio d folder 12 In real ……… the $1,000 you invested would be worth $5,000 today a words b facts c factors d terms 13 The higher the risk you ……… , the more money you could make a take b c make d invest 14 The market has been extremely ……… over the past few years a volatile b wavering c shocking d moving 55 Unit 4: Financial analysis 5.1 Based on the information in the two texts above, answer the following questions in your own words What’s financial statement analysis? …… …………… What’s the purpose of analyzing financial statements? …… …………… How many types of financial statement analysis? What are they? …… …………… Describe each type of financial statement analysis? …… …………… What is financial ratio analysis? …… …………… Give some examples of financial ratios and explain them …… …………… 5.2 Discussion – Work in pairs or groups and discuss the following questions Which particular skills and abilities among those below you think a financial executive needs? Essential skills Technical skills team work skill knowledge about finance language skills data analyzing skill problem solving skill maths communication skills …………………………… ……………………… Can you name any other skills or characteristics important for a financial executive? Do you think you possess the necessary skills? If you have yet to choose a career, you think it could be a financial executive? Why or Why not? 56 Unit 4: Financial analysis 6.1 Writing a classification essay What is a classification essay? In a classification essay, a writer organizes, or sorts, things into categories Three steps to effective classification: Step 1: Sort things into useful categories Step 2: Make sure all the categories follow a single organizing principle Step 3: Give examples that fit into each category Finding categories This is a key step in writing a classification essay To classify, or sort, things in a logical way, find the categories to put them into For example, say you need to sort the stack of papers on your desk Before you would put them in random piles, you would decide what useful categories might be: papers that can be thrown away; papers that need immediate action; papers to read; papers to pass on to other coworkers; or papers to file Thesis statement of a classification essay The thesis statement usually includes the topic and how it is classified Sometimes the categories are named (topic) (how classified) (category) (category) (category) Ex: Tourists in Hawaii can enjoy three water sports: snorkeling, surfing, and sailing How to write an effective classification essay A Determine the categories Be thorough; don't leave out a critical category For example, if you say water sports of Hawaii include snorkeling and sailing, but leave out surfing, your essay would be incomplete because surfing is Hawaii's most famous water sports On the other hand, don't include too many categories, which will blur your classification For example, if your topic is sports shoes, and your organizing principle is activity, you wouldn't include high heels with running and bowling shoes B Classify by a single principle Once you have categories, make sure that they fit into the same organizing principle The organizing principle is how you sort the groups Do not allow a different principle to pop up unexpectedly For example, if your unifying principle is "touristoriented" water sports, don't use another unifying principle, such as "native water sports," which would have different categories: pearl diving, outrigger, or canoe racing C Support equally each category with examples In general, you should write the same quantity, i.e., give the same number of examples, for each category The most important category, usually reserved for last, might require more elaboration Common classification transitions • The first kind, the second kind, the third kind • The first type, the second type, the third type • The first group, the second group, the third group 6.3 Writing practice How many types of financial analysis you know? What are their characteristics? Use the knowledge you have learned from this lesson and additional resources to write an essay to answer this question The suggested time for completing the exercise is 45 minutes 57 Unit 4: Financial analysis English terms B - Base year - Business cycle C - Credit analyst D - Debt security F - Financial instrument - Financial statement analysis G - Gross margin - Gross profit H - Horizontal analysis L - Liquidity - Liquidity ratio N - Net sales revenue O - Operational ratio P - Profitability ratio R - Ratio analysis S - Solvency - Solvency ratio T - Trend analysis V - Vertical analysis 58 Vietnamese equivalents - Năm bản/ chuẩn/ gốc - Chu kỳ kinh doanh - Người/Chuyên viên phân tích tín dụng - Chứng khốn nợ - Cơng cụ tài (như chứng khốn, cổ phần, tiền…) - Phân tích báo cáo tài - Mức lãi gộp/ biên lãi gộp (bán hàng) - Lợi nhuận gộp/ lãi mộc - Phân tích theo chiều ngang - Mức quay vịng vốn, khả tốn, tính lỏng - Tỷ suất tốn, tỷ suất lưu động - Doanh thu ròng - Tỷ suất kinh doanh - Tỷ suất (khả năng) sinh lợi - Phân tích hệ số/ tỷ lệ - Khả trả nợ - Tỷ suất khả toán - Phân tích xu hướng - Phân tích theo chiều dọc Revision A REVISION A UNIT OBJECTIVES - MỤC TIÊU • Review the topics introduced in Unit 1, Unit 2, Unit and Unit through reading and vocabulary exercises Ôn tập chủ đề học 1, 2, thông qua đọc từ vựng CONTENTS Finance and Companies 1.1 Read the summary below and decide whether each of the following is assets or liabilities and of what kind? Which three are not assets? A Assets An asset is something that has value, or the power to earn money These include: • current assets : money in the bank, investments that can easily be turned into money, money that customers owe, stocks of goods that are going to be sold • fixed assets: equipment, machinery, buildings and land • intangible assets: things which you cannot see For example, goodwill: a company’s good reputation with existing customers, and brands (see unit 22): established brands have the power to earn money If a company is sold as a going concern, it has value as a profit-making operation, or one that could make a profit B Liabilities Liabilities are company’s debts to supplier, lenders, the tax authorities, etc Debts that have to be paid within a year are current liabilities, and those payable in more than a year are long-term liabilities, for example bank loans Vans which a delivery company owns and uses to deliver goods Vans for sale in a showroom A showroom owned by a company that sells vans A showroom rented by a company that sells cars A sum of money that a company has to pay its supplier in the next six months 59 Revision A Money which customers owe, that will definitely be paid in the next 60 days Money which a bankrupt customer owes, that will certainly never be paid The client list of a successful training company, all of which are successful businesses A five year loan from a commercial bank 10 The client list of a training company, with names of clients that have all gone bankrupt 1.2 Match the words or expressions in the column A with their definition in column B Column A Column B A The contract telling the terms, conditions and purposes of a corporation Articles of Incorporation (n) B Separate unit for ownership or legal purpose Bankrupt (adj) C Unable to pay one’s debts and legally releases from the liability Board of Directors D A group of persons elected by stockholders to run a corporation Dividend (n) E The contract telling the terms and conditions of a partnership Entity (n) F Business owned by two or more individuals Expertise (n) G A share of the profits of a corporation which is given to the stockholders Income tax (n) H Special knowledge or ability Partnership (n) I One-owner business 10 Sole Proprietorship (n) J A tax which is based on the amount of money a person or company receives for labor , services, or products, and which cannot be added to the price of the labor , services or products 11 Turnover (n) K Sales revenue minus the cost of sales, before deductions for administration expenses, interest charges, etc 12 Net profit L Sales revenue minus the cost of making and selling the goods and deductions for administration expenses, interest charges, etc 13 60 Articles of Co-partnership (n) Gross profit M The total amount of money a company receives from selling goods or services Revision A 1.3 Decide which of the alternatives (A-H) each speaker is talking about Write the letter of your answer in the box at the end of the sentence There are some alternatives that you don’t have to use “We had to find a lender who was prepared to finance an exciting new company.” “Our lending to companies takes the from of conditional loans or debentures.” “If you not keep up with the repayments, we may sell your home to recover our money” “The company is highly geared so I wouldn’t invest in it.” “We owe our supplier $12,000 and we have a loan of $8,000 so the total is about $20,000.” A indebtedness C share capital D bond E B equity F gross profit G H collateral leverage venture capitalist Accountancy Choose a suitble word or phrase in the list to fill in each blank below auditors fair view accounts accountancy accountant window dressingthe bookkeepers Hi, I’m Fiona and I’m an (1)………… I work in Edinburgh for one big accountancy firms We look at the financial records or (2)………… of a lot of companies We work with the accountants of those companies, and the people who work under them:( 3) ………… I like my profession (4) ………… Sometimes we act as (5)………… : specialist outside accountants who audit a company’s accounts, that is, we check them at the end of the particular period to see if they give a true and (6)………… (an accurate and complete picture) An audit can take several days, even for a fairly small company When a company’s results are presented in a way that makes them look better than they really are, even if it follows the rules, it may be accused of creative accounting or (7)………… Of course, I never this! 61 Revision A Financial statement and analysis 3.1 Match the explanation in column A with its words in column B Column B Column A A formal description of income and costs for a time period that has finished A Balance sheet A formal description of a company’s financial position at a specified moment B Capital expenditure Items of value which are not easily changed into cash but which the business needs C Cash budget Money made by the company, less all costs, but before tax has been paid D Current assets The person who is responsible for the financial side of running a business E Dividends Individuals who invest their money in a company hope to regularly receive these F Finance director A plan of cash income and cash spending for a specific period of time G Financial advisor Cash items, or items that can easily be changed into cash for the present financial year H Fixed assets Major spending on large items necessary for the business, such as property or equipment I Pre-tax profit 10 Someone who advised people on how to manage their financial affairs J Profit and loss report 3.2 Choose the most suitable answers for the following questions The money raised from several international banks will help the airline's move to a new airport a finance b price c subsidise d compensate The car company is going to $220m in its production plan next year in order to double output a invest b fund c deposit d advance 62 Revision A The company was unable to pay its debts and was therefore declared a bankrupt b written off c uneconomic d indebted The bank has agreed a/an of $1m to finance the purchase of the new building a allowance b loan c accommodation d advance Last year they made a big profit from of their new product range a lending b purchases c sales d taxes At the end of a difficult year, the company are predicting pre-tax of $5.7m compared with $9.8m last year a benefits b profits c gains d winnings Goodfood Ltd recorded sales last year of about $1.7b and shareholders are expecting to receive a high on their shares a dividend b payout c margin d interest The shares that we bought in one of the new dotcom companies are expected to over the next two years a increase in value b increase in number c decrease in value d decrease in number The directors' key role is to reduce costs, increase sales and thereby profits a maximize b lead to c overcome d win 10 A good financial management system enables you to important big picture and daily financial objectives a foresee b withdraw c accomplish d practise Financial Results Choose a suitable word or phrase in the list to fill in each blank below a profit and loss account in the red bottom line accounting standard gross profit red ink exceptional profit pre-tax loss annual report loss “A firm reports its performance in a particular period in its results Results for a particular year are shown in the company’s (1)…… This contains, among other things, (2)…………… In theory, if a company makes more money than it spends, it makes a profit If not, it makes a (3)…………… But it’s possible for a company to show a profit for a particular period because of the way it presents its activities under the (4)……………or accounting rules of one country, and a loss under the rules of another My firm operates in many countries and we are very aware of this! 63 Revision A A pre-tax profit or a (5) …………… is one before tax is calculated An (6) ………….or loss is for something that is not normally repeated, for example the sale of a subsidiary company or the costs of restructuring A company’s (7) ……………is before charges like these are taken away; it net profit is afterwards The final figure for profit or loss is what people call informally the (8)…………… This is what they really worry about! If the company is making a loss, commentators may say that it is (9)………… They may also use expressions with (10)………… , saying, for example that a company is bleeding red ink or hemorrhaging red ink” 64 ... compared to shareholders’ capital Distributable profit _ Number of shares Sales 54 Unit 4: Financial analysis 4. 2 Choose the best alternative to complete each sentence The suggested time to this... easily compared, whether across the years for a single company or across different companies 49 Unit 4: Financial analysis Ratio Analysis R atio analysis enables the analyst to compare items on... company is faring relative to its (4) _ Industry average ratios are (5) _ from a number of (6) _, including: (a) Dun & Bradstreet Dun & Bradstreet computes 14 ratios for each of 125 (7)