1. Financial Statement Analysis.
2. What is Horizontal Analysis? How is it used? Describe a situation in which you might want to use Horizontal Analysis; what would you be looking for; what might it tell you; how might you decide if you like or dislike what you see? (briefly, no more than a paragraph)
3. What is Vertical Analysis? How is it used? Describe a situation in which you might want to use Vertical Analysis; what would you be looking for; what might it tell you; how might you decide if you like or dislike what you see? (briefly, no more than a paragraph)
4. Referring toDunhillHealth System again, calculate these ratios for 2012 anddescribe in a phrase or sentence what each one tells about the organization:
5. Current Ratio,
6. Days Cash on Hand
7. Operating Margin
8. Long term Debt to Net Assets Ration.
9. If you were running asmall free-standing surgical center, what 3 ratios might you be interested in monitoring and explain why. (briefly, no more than a paragraph)

1 Horizontal Analysis: Horizontal analysis is the analysis which helps in analyzing and comparing the financial poisition of the company from the previous years. It also helps in comparing the financial and the performance of the company from the other companies. When we want to compare the growth in terms of sales or income of the company from the previous year then we tend to use horizontal analysis. If the company shows a negative growth then the company's performance has decreased whereas if the growth is positive, then the performance of the company has improved. 2 Vertical analysis: Vertical analysis is the which helps in analyzing the proportion of different assets, liabilities and equity as compared to the total assets and the proportion of revenues and expenses to the total revenue of the company. This analysis helps in knowing how much variation the company has had in its revenues and expenses and the assets, liabilities and equity over the years. If the company has large variations that means that the company has effect on its performance. 3 Current ratio = Current assets / Current liabilities = 2517322/1367829 = 1.840 The current ratio of the company is 1.840 which means that the company holds the current assets of the company are 1.84 times its current liabilities. Days cash in hand = 365/(Sales/Accounts receivable) = 365/(4764250/64077) = 4.909084 Days cash in hand states the number of days the company takes to convert its receivable, the company is able to convert its receivables in 4.9 or 5 days Operating margin = operating income / revenue = 152932/4764250 = 3.21% The operating income margin is the operating income that the company earns in proportion to its revenues. The company has operating margin of 3.21% i.e. the company earns 0.0321 on every dollar of revenue. Long term debt to net assets = 3711984 / 2868046 1.294255 The long term debt to net assets is 1.29 which states that the company has high long term debts. The three ratios that I might consider important will be current ratio, as it helps in telling the liquidity of the firm, profit margin helps in analyzing the profitablity of the ciompany and its debt to asset ratio which helps in telling the solvency of the firm. high long term debts. 1 Horizontal Analysis: Horizontal analysis is the analysis which helps in analyzing and comparing the financial poisition of the company from the previous years. It also helps in comparing the financial and the performance of the company from the other companies. When we want to compare the growth in terms of sales or income of the company from the previous year then we tend to use horizontal analysis. If the company shows a negative growth then the company's performance has decreased whereas if the growth is positive, then the performance of the company has improved. 2 Vertical analysis: Vertical analysis is the which helps in analyzing the proportion of different assets, liabilities and equity as compared to the total assets and the proportion of revenues and expenses to the total revenue of the company. This analysis helps in knowing how much variation the company has had in its revenues and expenses and the assets, liabilities and equity over the years. If the company has large variations that means that the company has effect on its performance. 3 Current ratio = Current assets / Current liabilities = 2517322/1367829 = 1.840 The current ratio of the company is 1.840 which means that the company holds the current assets of the company are 1.84 times its current liabilities. Days cash in hand = 365/(Sales/Accounts receivable) = 365/(4764250/64077) = 4.909084 Days cash in hand states the number of days the company takes to convert its receivable, the company is able to convert its receivables in 4.9 or 5 days Operating margin = operating income / revenue = 152932/4764250 = 3.21% The operating income margin is the operating income that the company earns in proportion to its revenues. The company has operating margin of 3.21% i.e. the company earns 0.0321 on every dollar of revenue. Long term debt to net assets = 3711984 / 2868046 1.294255 The long term debt to net assets is 1.29 which states that the company has high long term debts. The three ratios that I might consider important will be current ratio, as it helps in telling the liquidity of the firm, profit margin helps in analyzing the profitablity of the ciompany and its debt to asset ratio which helps in telling the solvency of the firm. high long term debts