STRIDENT- FINANCIALS BY - RAHUL JAIN

Three Basic business Activites Financing activities : z Financing activities : - Owners contribute cash and receive equity shares in return. - Creditors loan cash in return for the promise of interest and principal payments. Investing activities : z Investing activities : Once the capital is collected it is invested in producing assets, like buildings, equipment, machinery and vehicles. Operating activities: z Operating activities: The assets are operated to produce goods & services which are sold to customers.

Financial Statements zThe Balance Sheet zThe Balance Sheet includes assets (inventory of goods and producing assets) and financing sources (equity, debt and reinvestments from net income) of the business. The Income Statement z The Income Statement Accounts for all activities involved in the operation of the business over a period of time. It contains a list of all operating expenses and revenues of the business. It discloses the profits or loss of the business

Financial Statements The Statement of Retained Earnings z The Statement of Retained Earnings Reports how much of the net income from the operating activities are retained by the business and how much paid as dividends. zThe Statement of Cash Flows zThe Statement of Cash Flows Details all the cash inflows and outflows that occurred over a period of time associated with the operating, investing and financing activities of the business.

STABILITY zIt means adequate ySolvency yLiquidity yProfitabilty To run the operations

Using Ratios to Assess Stability zLiquidity: Can we make required payments as they fall due? yCurrent Ratio = Current Assets/Current Liabilities zProfitability: Do sales prices exceed unit costs, and are sales high enough as reflected in Profitability Margin?

Using Ratios to Assess Stability yProfitabilityRatio = Net Profit /Sales yDebt management: Do we have the right mix of debt and equity? Debt Equity ratio = Debt/Equity Interest coverage ratio= EBIT/Interest

Assessment of Strident

zSound Solvency as Low Debt ratios and high Interest coverage ratio zSound Liquidity as high liquidity zAverage Profitability