Comparative Analysis of Financial Statements Between Two...

A Case Report on the Financial Statements of Reed Elsevier and Thomson Corporation Executive Summary With the objective to understand the business performance of the two entities, we reviewed the 2007 financial statements of both company and tried to obtain some insight on the profitability and solvency of each entity. The two companies we study are: Reed Elsevier and Thomson, in the filed of information and publishing. Reed Elsevier is listed in below stock exchanges: REN (Euronext Amsterdam), REL (London), RUK and ENL (NYSE). Thomson was shown (before acquiring Reuters) as TOC (NYSE) and TOC (TSX). As the two multinational companies we are studying covering diversified businesses, here in the article we are only†¦show more content†¦Net Income from Discontinued Operations†¨ The amount shown on the income statement under discontinued operations is the profit made during the period from the businesses that will not be a part of the company in the future. The net profit for the year of Reed Elsevier is higher almost by 50% due to the profit made from discontinued operations. The net profit of the Thompson Corporation has also grown by almost 4 times, which is also due mostly to the earnings from discontinued operations. Net Profit Margin Now let’s see how much profit a company makes for every $ 1 it generates in revenue. Profit margins vary by industry, but all else being equal, the higher a company’s profit margin compared to its competitors, the better. Reed Elsevier: 1,713 / 6,693= 0.26 Thompson: 1,096 / 7,296 = 0.15 Return on Equity (ROE) One of the most important profitability metrics is return on equity. Return on equity reveals how much profit a company earned in comparison to the total amount of shareholder equity. It’s what the shareholders â€Å"own†. A business that has a high return on equity is more likely to be one that is capable of generating cash internally. For the most part, the higher a company’s return on equity compared to its industry, the better. Let’s calculate ROE for Thomson: the earnings for 2007 were 4,004, andShow MoreRelatedScope of the Study1611 Words   |  7 Pagesproviding an insight into the financial position by comparing the Balance Sheet of Auto Syndicate Private Ltd. This study confined to five years data from annual reports 2006-2010, financial statements and other records of the Auto Syndicate Private Ltd. OBJECTIVES OF THE STUDY: The study is undertaken with the following objectives * To study the liquidity position of the company. * To analyze the financial performance of the company. * To predict the general financial position and profitabilityRead MoreComparative analysis of two international companies1130 Words   |  5 Pagesï » ¿ Comparative Analysis of Two International Companies Trident University International Accounting for Decision Making - ACC501 April 22, 2013 Comparative Analysis of Two International Companies Caribou Coffee Company, Inc. is a leading coffee company in the United States that boasts the second largest premium coffee operation in the U.S. (Caribou, n.d.). The Frazer Group is an international food services company, based in Finland, that seeks to grow with an optimistic viewRead MoreThe Performance Of A Firm903 Words   |  4 Pagesdate financial information. This information is contained in three financial statements: the income statement, the balance sheet and the statement of cash funds (Melicher Norton, 2014). Each of these statements indicates a certain aspect of the financial status of the firm and reveal the critical financial elements of the business; revenues, expenses, assets, liabilities, and equity (Melicher Norton, 2014). When combined, these financial statements should provide the overall financial statusRead MoreFinancial Statement Analysis-Questions (1)1097 Words   |  5 Pages------------------------------------------------- BBA 4201: Financial Statement Analysis amp; Control 1. Describe some of the analytical uses to which financial statement analysis can be put. 2. What are the sources of financial information? 3. Who are the users of financial statements? 4. What are the objectives of financial statements? 5. What are the limitations of financial statement analysis? 6. Discuss the need for comparative analysis. 7. Identify the tools of financial statement analysis. 8. ExplainRead MoreFinancial Statement Analysis-Questions (1)1087 Words   |  5 Pages------------------------------------------------- BBA 4201: Financial Statement Analysis amp; Control 1. Describe some of the analytical uses to which financial statement analysis can be put. 2. What are the sources of financial information? 3. Who are the users of financial statements? 4. What are the objectives of financial statements? 5. What are the limitations of financial statement analysis? 6. Discuss the need for comparative analysis. 7. Identify the tools of financial statement analysis. 8. Explain andRead MoreFinancial Performance Review and Objective1405 Words   |  6 Pages A STUDY ON FINANCIAL PERFORMANCE OF MATHRUBHUMI PRINTIONG amp; PUBLISHING COMPANY LIMITED, CALICUT COMPANY PROFILE Mathrubhumi  is one of the front-runners among the Malayalam newspapers. The first copy of Mathrubhumi  was published on 18th of March 1923K. P. Kesava Menon, the prominent freedom fighter, as Editor and K. Madhavan Nair as Managing Director of it.In the beginning, the paper was published a week and had just one edition from Kozhikode (Calicut).Now with fourteen editions, includingRead MoreFinancial Performance Review and Objective1419 Words   |  6 Pages A STUDY ON FINANCIAL PERFORMANCE OF MATHRUBHUMI PRINTIONG amp; PUBLISHING COMPANY LIMITED, CALICUT COMPANY PROFILE Mathrubhumi  is one of the front-runners among the Malayalam newspapers. The first copy of Mathrubhumi  was published on 18th of March 1923K. P. Kesava Menon, the prominent freedom fighter, as Editor and K. Madhavan Nair as Managing Director of it.In the beginning, the paper was published a week and had just one edition from Kozhikode (Calicut).Now with fourteen editions, includingRead MoreSummary of Research for Accounting Changes and Error Analysis1143 Words   |  5 PagesAccounting Changes and Error Analysis Companies have always faced issues of how to reflect changes in accounting methods and error corrections in financial statements. A change in accounting principle results when an entity adopts a generally accepted accounting principle different from the one it used previously (Hall 2007). A presumption exists that an accounting principle once adopted shall not be changed in accounting for events and transactions of a similar type (Financial Accounting Standards Board)Read MoreFinancial Analysis : The General Electric Company1696 Words   |  7 PagesIntroduction Financial analysis gives the clear outlook of the performance parameters of an organization. It helps in evaluating and comparing the present as well past performance. This analysis is an important tool for the management, investors as well as the outsiders who deal with organization. This analysis presents the way of functioning and the direction in which an organization is moving. The analysis is done with the help of common size analysis, comparative analysis and Ratio Analysis. The analysisRead Morewe have nothing to do there1480 Words   |  6 Pagesto separate the irregular items in the income statement? How are extraordinary items different from some other irregular items that you occasionally see on a corporate income statement (e.g., items such as restructuring costs, currency gain on foreign exchange transactions, etc.)? According to accounting standard it is necessary to present irregular items in the income statement separately. Otherwise they can make confusion to user of income statement. Extraordinary items are caused by outsiders