Chapter 3
Working with Financial Statements
Last class we went over how to organize a balance sheet and income statement. This class we are going
to learn more how to use a financial statement.
Maybe we want to compare two companies. Financial statements are what make that possible.
What if we want to know how liquid a company is – or how quickly or easily will it be for them
to get cash.
How good of a job did the company do managing its cash – how profitable are they?
Financial Ratios
We calculate ratios in order to compare and investigate relationships between different pieces of
information
• For each ratio, ask yourself:
– What the ratio is trying to measure
– Why that information is important
Categories of Financial Ratios:
Solvency – assets – the firm owns them and they make money for the firm. Liabilities – the firm
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CHAPTER 3: STRATEGIC AND FINANCIAL LOGISTICS
Multiple Choice Questions (correct answers are bolded)
1. Depending on industry and product type, reverse logistics costs as a percent of revenue can
range between ___________ and ___________ percent.
a. 5; 10
b. 4; 8
c. 3; 6
d. 2; 4
[LO: material at beginning of the chapter; Moderate; Application; AACSB Category 3:
Analytical thinking]
2. Which of the following is not a level at which strategy can be formulated?
a. corporate
b. business unit
c. functional
d. individual location
[LO 3.1: To understand how logistics decisions can influence an organization’s strategic
financial outcomes; Moderate; Synthesis; AACSB Category 3: Analytical thinking]
3. ___________ strategy is focused on determining the goals for the company, the types of
Chapter One Functions of Financial Markets
一． Translate the following sentences into Chinese.
1. China’s banking industry is now supervised by the PBC and CBRC. In addition, the MOF
is in charge of financial accounting and taxation part of banking regulation and
management.
目前中国银行业主要由中国人民银行和银监会进行监管。此外，财政部负责银行业监管的财务会计及税收方面。
2. Currently Chinese fund management companies are engaged in the following business:
securities investment fund, entrusted asset management, investment consultancy,
management of national social security funds, enterprise pension funds and QDII
businesses.
目前中国的基金管理公司主要从事以下业务：证券投资基金业务、受托资产管理业务、投资咨询业务、社保基金管理业务、企业年金管理业务和合格境内机构投资者业务等。
3. China's economy had 10% growth rate in the years before the world financial crisis
of 2008. That economic expansion resulted from big trade surpluses and full investment.
Part 4: Chapter 2– Intangible assets (IAS 38)
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IAS 38 – INTANGIBLE ASSETS
DEFINITION
An intangible asset is an identifiable non-monetary asset without physical substance.
An asset is identifiable if it either
- Is separable, ie is capable of being separated or divided from the entity and sold, transferred, licensed,
rented or exchanged, either individually or together with a related contract, identifiable asset or liability,
regardless of whether the entity intends to do so; or
- Arises from contractual or other legal rights, regardless of whether those rights are transferable or
separable from the entity or from other rights and obligations.
RECOGNITION
An asset shall be recognised if, and only if:
- It is probable that the expected future economic benefits that are attributable to the asset will flow to the
