Techniques To Analyze Financial Statement

1. (Payee, Drawee) the recipient of the money.
2. (Bank Statement, Deposit) shows the beginning balance, additions, deductions, and the balance at
the end of the period.
3. (Saving Account, Current Account) money held under a checking account can be withdrawn through
issuance of a check
4. (Saving Account, Time Deposit) These are intended to provide an incentive for the depositor to save
money.
5. (Drawer, Drawee) the bank or other financial institution where the cheque can be presented for
payment.
6. (Cross Checks, Stale Check) It should be deposited to the payees account.
7. (Account number, Check number) a unique identifier of the account maintained by the depositor.
8. (Signature of the Depositor, Bank account) is the most important part in the withdrawal slip.
9. (Stale Check, Postdated check) to be encashed or deposited until the indicated date arrive in the face
value of the check.
10. (Deposit, Withdrawal) will put in money to his account.
1. bank account – is a record maintained by a banking institution, in which it records an ongoing series of
cash deposit and withdrawal on behalf of a customer
2. Deposit slips - is a form which provided by the bank to put in money to the depositors account.
3. Withdrawal slips – is a written order to your bank to take out money in your account
4. check - is a written, dated, and signed instrument that directs a bank to pay a specific sum of money
to the bearer
5. bank statement - a statement from the bank showing the activity in a company's deposits received by
the bank, checks paid by the bank, bank service charge, and other amounts transferred into and out of
the checking account.
Techniques to Analyze Financial Statement:
1. Comparative Statement - shown the financial information for current a prior periods which allows the
statement user to compare changes in the individual items
2. Horizontal Analysis – (also known as Trend Analysis) the presentation of financial statement data on a
percentage basis over time.
For example, you compare a company's sales in 2019 to its sales in 2020. ... (2020-201│2019) The result
shown the relative growth or decline of each item in terms of the base year. What’s In 9
3. Vertical Analysis – (also known as Common-Size Analysis) the presentation of each item on the
financial statement as a percentage of an appropriate base amount. In the statement of performance
the base amount is the Net Sales expressed as 100% .In the balance sheet the base amount is the Total
Asset or Total Liabilities and Owners’ Equity expressed also as 100% Ratio Analysis It provides an
indication of the firm’s financial strength and weaknesses and should generally be used in conjunction
with other evaluation techniques.
1. Short –term solvency – ability of an entity to meet its current obligation as they mature. Example:
Current ratio = (current asset)/ (current liabilities)
2. Long- term solvency – the ability of the firm to meet interest payments precondition for the
repayment of principal.
Example: Debt to Equity Ratio, times interest earned, times preferred dividends earned
3. Operational efficiency – the ability of the business entity to generate income and earn a satisfaction
return of investment
Example: Gross Margin Ratio, Profit Margin Ratio; Return to Assets; Return to Owners’ Equity; Asset
Turn Over Ratio
4. Profitability – the ability of the firm to generate income and earn satisfactory returns to common
stockholders
Example: Return To common Stockholders’ Equity; Earnings per share (EPS); Price –Earnings ratio & etc.
5. Investment Analysis – measures total investment provided by the stockholders and resources provided by the
creditors Example: Equity Ratio; Book Value per share; Creditors’ Equity to Total Assets
Types of Bank Accounts
1. Saving Accounts -earns interest -does not have an overdraft facility -used for short-term saving -maintain specific
minimum balance
2.Checking or Current Accounts -by issuance of checks - overdraft facility -avail to people who earn
regular/business income - bank statement -allows numerous withdrawals and unlimited deposit -bank charges
3. Time Deposit - money deposited into account and release of money until the agreed upon date with additional
interest earned -it might be deposit in short or long term period of time
4. Credit Account (with Credit Card) -account either with the store or bank -holder purchase items now and pay
later -payment either lump sum or installment
5. Debit account ( with Debit Card) -used to pay purchases -upon used of card automatically deducted from his
account
6. Bank account in Foreign Currency - cash items deposited in foreign countries - denominated in different foreign
currencies
Preparing Check: How to write a check.
Step 1: Date the check. Write the date on the line at the top right-hand corner. ...
Step 2: Who is this check for? ...
Step 3: Write the payment amount in numbers. ...
Step 4: Write the payment amount in words. ...
Step 5: Write a memo. ...
Step 6: Sign the check
Checks is an order written by a depositor instructing the bank to pay a specific amount to a recipient from the
depositor’s bank account. Using a check as medium of exchange in a transaction involves three parties as follows:
• Drawer, the person or entity who makes the check
• Payee, the recipient of the money
• Drawee, the bank or other financial institution where the cheque can be presented for payment
A check is generally valid up to a six-month period from the date of the check
There are two criteria before a check can be converted into cash:
1. A check was received from a customer on or before the balance sheet date and
2. The check date is dated on or before the balance sheet date.
Content of Bank Statement
At the end of every month, the bank furnishes a statement to the depositor showing the movement of the
account. It contain all the withdrawals, deposits and balance of your account after every transaction. It may also
indicate bank charges that were deducted by the bank automatically. Also, interest earned by the account is
likewise reflected
The process of filling out deposit slips:
Date of Deposit: Today’s date

Type of Account: check if the Savings/Current/Peso/Dollar
Account name: Complete name of the depositor
Account number unique identifier of the account maintained by the Depositor (enter the 10 digit or 12 digit)
List the cash amount of your deposit or list checks individually and add up the deposited amounts
Note: Separated deposit slips for Cash and Checks
What to fill-up in the Withdrawal Slip

Date of deposit: Today’s date
Type of Account: check if the Savings/Current/Peso/Dollar
Account Name: Complete name of the depositor
Account Number: unique identifier of the account maintained by the Depositor (enter the 10 digit or 12 digit)
Amount in Words: write the amount of money you want to withdraw in words
In figures: write the amount of money you want to withdraw in figures
Signature of the Depositor: this is the most important part in the withdrawal slip as a proof for authorizing the
bank to take out money from his bank account.

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1. (Payee, Drawee) the recipient of the money.

Techniques to Analyze Financial Statement:

Content of Bank Statement

The process of filling out deposit slips:

Date of Deposit: Today’s date

What to fill-up in the Withdrawal Slip

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