Patrimonal analysis

Question 1

wealth of patrimony

Answer 1

= set of goods, rights and obligations that allow an economic unit to satisfy its needs or carry out

Question 2

assets

Answer 2

Non current assets (used for its activity, not for sale) –> long terms
current assets (to develop ordinary activity, inventory/cash) –> short term

Question 3

liquidity + equity

Answer 3

• own resources (provided by shareholders and wealth self generated)
• long term external resources (payables to fund the assets)
• short term external resources (payment obligations to fund assets)

Question 4

non current assets

Answer 4

• intangible (patents, copyright)
• real estate investments (land, buildings)
• material/tangible
• financial (long term financial investments)

Question 5

current assets

Answer 5

• NCA kept for sale
• inventories (merchandise/trade goods, goods in process)
• debtors (customers receivable, debtors receivable)
• financial (cash, short term financial statements

Question 6

equity

Answer 6

• shareholders funds (capital)
• self generated funds (reserves; retained earnings, results’ profit/loss)

Question 7

external funds

Answer 7

• long term
• short term

(debts, non-commercial or commercial

Question 8

purpose of patrimonial analysis

Answer 8

= to improve decision making of users
- external: shareholders, banks/lenders, customers, analysts
- internal: top managers, intermedium managers

Question 9

Basic advices

Answer 9

1. current assets twice as much as current liabilities
2. exigible CA + available CA = current liabilities
3. equity must be 40/50% of total liabilities

Question 10

what is a profitability analysis

Answer 10

= evaluation of company’s ability to generate profit
- could have effect in short/medium term on liquidity/solvency
- focus on ordinary/recurring results (extraordinary isn’t representative of the management)
- alternative indicator –> EBITDA (earnings before interests, taxes, depreciations and amortization)

Question 11

asset rotation

Answer 11

= number of times the asset has been sold and replaces. Ability of assets to generate sales

Question 12

solvency analysuis

Answer 12

= evaluatie company’s equity situation (financial & investment), in order to analyze it’s overall equilibrium position
- assess whether a company will be able to face debts in long term

Question 13

financial sheet notes (from in class)

Answer 13

DEBIT CREDIT
expenses (left) | revenue (right)

debit balance –> more expenses –> loss
credit balance –> more revenue –> profit