Financial Statement Analysis

Division of Agricultural Sciences and Natural Resources Oklahoma State University
AGEC-997
Phil Kenkel
story Fitzwater Cooperative Chair
Boards of Directors turn in the responsibility to evaluate the annual take stock and to track the financial successes or failures of the reconciling. This means the directors need to non only be able to read the financials and see trends, scarce they also must be able to understand the primal ca theatrical roles of those trends. The board must be able to compare their reconciling financials to industry benchmarks, peer performance, and company projections. They will then use this information to build strategic plans and financial projections for the coming year.
such(prenominal) of this analysis is common sense analysis. Directors should be able to peter out the cooperatives financial statement and identify factors that stupor each statement. The factors that impact long-term growth are close important. The cooperative should pay particular attention to the local nest egg (loss) of the cooperative. This means that the cooperative only looks at ratios calculated from the hire and disbursals of the main cooperative, not the patronage received from regional investments.




erstwhile this common sense analysis is complete, the board can stir up on to a more in depth require of the cooperative, utilizing common size analysis, peer analysis, and an in-depth ratio analysis.
Common coat Analysis
A common size analysis scales the financials into a function of sales for the income statement and a percentage of total assets on the balance sheet. The scaling effect highlights the most important expense areas and can reveal problem areas that may not have been noticed before. It also provides a way to compare year-to-year variations in financials.
Peer Analysis
A peer analysis involves comparing the cooperatives performance with the performance of other cooperatives of a comparable size, industry, and primary business type. For example, if the company is an Oklahoma grain...If you want to jump a full essay, order it on our website: Orderessay



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