F S INANCIAL TATEMENTS R A AND ATIO NALYSIS Jeff Goolsby, Shareholder, CPA, MSA Moore Stephens Lovelace, P.A. 1 O S VERVIEW OF THE ESSION A Provide information on how ratios can provide insight  into financial statements B Give information about key ratios and what the data  can tell you C Provide insight into what management should focus  on in understanding numbers D Clarify when ratios are not helpful  E Overview ready to access ratios available for Florida  Government’s 2 T F/S M – RADITIONAL EASURES B S ALANCE HEET Cash Payables and Accruals • • Accounts Receivable Current portion of Debt • • Inventory Current Liabilities • • Investments Long-Term Debt • • Current Assets Total Liabilities • • Total Assets Retained Earnings • • Total Equity • 3 T F/S M – RADITIONAL EASURES O S THER TATEMENTS Income Statement Cash Flows Revenue Cash flows from • • operations, investing, Costs of Goods Sold • and financing Gross Margin • Net change in cash • Other Expenses • Activity of PPE, • Operating Income • Investments, Debt, and Net Income • Equity 4 U G M – NIQUE OVERNMENTAL EASURES A S LL TATEMENTS Deferred outflows of Nonspendable fund • • resources balance Deferred inflows of Intergovernmental • • resources revenues Net investments in capital Cash flows form noncapital • • assets financing activates Unrestricted Net Position / Cash flows from capital • • unassigned fund balance and related financing activities Restricted Net Position / • assigned fund balance 5 W N D ’ A U HEN THE UMBERS ON T DD P 6 V I ALUE OF NFORMATION Gives reader understanding of:  the size of organization and its activities • composition of resources and liabilities • results of operations and impacts on cash • Generally comparative allowing easy comparison  to prior year Generally governmental statements are single year • Footnotes contain detailed information  MD&A can provide insight into reasons • 7 S U TATEMENT SERS Creditors  Bondholders  Owners  The Market  Potential Buyers / Investors  Competitors  Management  Citizens  8 U F – T P SER OCUS HIRD ARTIES Liquidity of an entity and its ability to make interest  and principal payments Long-term cash flow of the entity as well as the  entities future level of risk and return, which impacts return on investment Ability to provide dividends (public co’s)  Operational results for comparative purposes  9 U F – M SER OCUS ANAGEMENT Liquidity of an entity and its ability to make interest  and principal payments Planning – Assessing current financial position and  evaluating potential opportunities Asset Management – Use of assets for efficiency  and best return on investment Understanding – How external parties analyze the  entity 10