Learning Bank Reconselation

Step 1.
Balance per Bank Statement on Aug, 31. 2006
Adjustments:
Add: Deposits in transit
Deduct: Outstanding checks
Add or Deduct: Bank errors
Adjusted/Corrected Balance per
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Bank Step 2.
Balance per Books on Aug, 31 2006
Adjustments:
Deduct: Bank service charges
Deduct: NSF checks & fees
Deduct: Check printing charges
Add: Interest earned
Add: Notes Receivable collected by bank
Add or Deduct: Errors in company's Cash account
Adjusted/Corrected Balance per Books

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Liquidity Analysis Ratios

Current Ratio

Current Assets
Current Ratio = ------------------------
Current Liabilities

Quick Ratio

Quick Assets
Quick Ratio = ----------------------
Current Liabilities

Quick Assets = Current Assets - Inventories

Net Working Capital Ratio

Net Working Capital
Net Working Capital Ratio = --------------------------
Total Assets

Net Working Capital = Current Assets - Current Liabilities


Profitability Analysis Ratios
Return on Assets (ROA)

Net Income
Return on Assets (ROA) = ----------------------------------
Average Total Assets

Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2

Return on Equity (ROE)

Net Income
Return on Equity (ROE) = --------------------------------------------
Average Stockholders' Equity

Average Stockholders' Equity
= (Beginning Stockholders' Equity + Ending Stockholders' Equity) / 2

Return on Common Equity (ROCE)

Net Income
Return on Common Equity (ROCE) = --------------------------------------------
Average Common Stockholders' Equity

Average Common Stockholders' Equity
= (Beginning Common Stockholders' Equity + Ending Common Stockholders' Equity) / 2

Profit Margin

Net Income
Profit Margin = -----------------
Sales


Earnings Per Share (EPS)

Net Income
Earnings Per Share (EPS) = ---------------------------------------------
Number of Common Shares Outstanding



Activity Analysis Ratios
Assets Turnover Ratio

Sales
Assets Turnover Ratio = ----------------------------
Average Total Assets

Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2

Accounts Receivable Turnover Ratio

Sales
Accounts Receivable Turnover Ratio = -----------------------------------
Average Accounts Receivable

Average Accounts Receivable
= (Beginning Accounts Receivable + Ending Accounts Receivable) / 2

Inventory Turnover Ratio

Cost of Goods Sold
Inventory Turnover Ratio = ---------------------------
Average Inventories

Average Inventories = (Beginning Inventories + Ending Inventories) / 2


Capital Structure Analysis Ratios
Debt to Equity Ratio

Total Liabilities
Debt to Equity Ratio = ----------------------------------
Total Stockholders' Equity


Interest Coverage Ratio

Income Before Interest and Income Tax Expenses
Interest Coverage Ratio = -------------------------------------------------------
Interest Expense

Income Before Interest and Income Tax Expenses
= Income Before Income Taxes + Interest Expense


Capital Market Analysis Ratios
Price Earnings (PE) Ratio

Market Price of Common Stock Per Share
Price Earnings (PE) Ratio = ------------------------------------------------------
Earnings Per Share


Market to Book Ratio

Market Price of Common Stock Per Share
Market to Book Ratio = -------------------------------------------------------
Book Value of Equity Per Common Share

Book Value of Equity Per Common Share
= Book Value of Equity for Common Stock / Number of Common Shares

Dividend Yield

Annual Dividends Per Common Share
Dividend Yield = ------------------------------------------------
Market Price of Common Stock Per Share

Book Value of Equity Per Common Share
= Book Value of Equity for Common Stock / Number of Common Shares

Dividend Payout Ratio

Cash Dividends
Dividend Payout Ratio = --------------------
Net Income



ROA = Profit Margin X Assets Turnover Ratio
ROA = Profit Margin X Assets Turnover Ratio

Net Income Net Income Sales
ROA = ------------------------ = -------------- X ------------------------
Average Total Assets Sales Average Total Assets

Profit Margin = Net Income / Sales
Assets Turnover Ratio = Sales / Averages Total Assets

SMART SENTENCES

SMART SENTENCES
1. God is real, unless declared integer

2. Before borrowing money from a friend, decide whether you need more.

3. Death is hereditary.

4. There are three sides to every argument: your side, my side and the right side.

5. An expert is someone who takes a subject you understand and makes it sound confusing.

6. Many things can be preserved in alcohol. Dignity is not one of them.

7. Never argue with a fool. People might not know the difference.

8. When you're right, no one remembers. When you're wrong, no one forgets.

9. Cheer up, the worst is yet to come.

10. Always remember that you are absolutely unique. Just like everyone else.

11. Well done is better than well said.

12. Everyone makes mistakes. The trick is to make them when nobody is looking.

13. Always borrow money from a pessimist. He won't expect it back.

14. If you can't see the bright side of life, polish the dull side.

15. Where there's a will there are five hundred relatives.

16. Everybody wants to go to heaven, but nobody wants to die.