Copyright Texas Education Agency, 2012. All rights reserved. 1
Assessing Financial Information Statistics & Risk
Management
Slide 2
Copyright Texas Education Agency, 2012. All rights reserved.
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Slide 3
Copyright Texas Education Agency, 2012. All rights reserved.
Two Main Sources Internal Internal Finance Department Accounting
Department External External News Media Universities Government
3
Slide 4
Copyright Texas Education Agency, 2012. All rights reserved.
Technology Computerized Financial Accounting Systems. Computerized
Financial Accounting Systems. Web Browser Based Markets &
Brokers. Web Browser Based Markets & Brokers. Hand-Held
Delivery Systems. Hand-Held Delivery Systems. TV and Radio Delivery
Systems TV and Radio Delivery Systems 4
Slide 5
Copyright Texas Education Agency, 2012. All rights reserved.
Preliminary Assessment Consider the Source. Consider the Source.
Consider the Objective. Consider the Objective. Consider the
Audience. Consider the Audience. Look beyond the conclusions and
examine the data! Look beyond the conclusions and examine the data!
How does it apply to you? How does it apply to you? Is an Action
necessary? Is an Action necessary? Are procedural or policy changes
needed? 5
Slide 6
Copyright Texas Education Agency, 2012. All rights reserved.
Cynics Look at Sample Size and Selection Sample Size and Selection
Gathering Methodologies Gathering Methodologies Analysis
Methodologies Analysis Methodologies Incomplete Data Picture
Incomplete Data Picture Misleading Conclusions Misleading
Conclusions 6
Slide 7
Copyright Texas Education Agency, 2012. All rights reserved.
Assessment Ratios Profitability Ratios measure the profitability of
the organization. Profitability Ratios measure the profitability of
the organization. Gross profit margin Operating profit margin Net
profit margin Return on assets (ROA) Return on equity (ROE) 7
Slide 8
Copyright Texas Education Agency, 2012. All rights reserved.
Assessment Ratios Liquidity Ratios measure the organizations
ability to meet short-term obligations. Liquidity Ratios measure
the organizations ability to meet short-term obligations. Current
ratio Quick ratio 8
Slide 9
Copyright Texas Education Agency, 2012. All rights reserved.
Assessment Ratios Debt Ratios measure the amount of debt an
organization is using and the ability of the organization to pay
off the debt. Debt Ratios measure the amount of debt an
organization is using and the ability of the organization to pay
off the debt. Total assets ratio Times interest earned ratio 9
Slide 10
Copyright Texas Education Agency, 2012. All rights reserved.
Assessment Ratios Asset Activity Ratios measure how efficiently the
company is using its assets. Asset Activity Ratios measure how
efficiently the company is using its assets. Average collection
period ratio, Inventory turnover ratio, and Total asset turnover
ratio. 10
