【正文】 ceivables at the close of the year unless at that date receivables do not represent the normal amount of credit extended to customers. Terms of sale must be considered in judging the turnover of receivables. For example, if sales for the year are $1,200,000 and average receivables amount to $100,000, the turnover of receivables is $1,200,000/$100,000=12. Now, if credit terms to customers are in thirty days we can see that receivables are paid promptly. Consideration should also be given market conditions and the stage of the business cycle. Terms of credit are usually longer in farming sections than in industrial centers. Collections are good in prosperous times but slow in periods of crisis and liquidation. Trends in the liquidity of receivables will also be reflected in the ratio of accounts receivable to notes receivable, in cases where goods are typically sold on open account. A decline in this ratio may indicate a lowering of credit standards since notes receivable are usually given to close overdue open accounts. If possible, a schedule of receivables should be obtained showing those not due, due, and past due thirty, sixty, and niy days. Such a, schedule is of value in showing the efficiency of credits and collections and in explaining the trend in turnover of receivables. The more rapid the turnover of receivables the smaller the risk of loss from bad debts。 in turn, pare them with: I. Such data as are absent from the parative statements but are of importance in judging a concern39。s value is determined based on M amp。 A business process can make use of deferred tax in terms of a reasonable tax avoidance, but the current loss of business as a profit potential acquisition target, especially when the acquiring pany is highly profitable, can give full play to plementary acquisitions both tax advantage. Since dividend ine, interest ine, operating ine and capital gains tax rate difference between the large mergers and acquisitions take appropriate ways to achieve a reasonable financial deal with the effect of tax avoidance. To increase business value. M amp。 Finance has an important practical significance. We need to use financial ratios in analyzing financial statements.—— The analysis of parative financial statements cannot be made really effective unless it takes the form of a study of relationships between items in the statements. It is of little value, for example, to know that, on a given date, the Smith Company has a cash balance of $1oooo. But suppose we know that this balance is only IV per cent of all current liabilities whereas a year ago cash was 25 per cent of all current liabilities. Since the bankers for the pany usually require a cash balance against bank lines, used or unused, of 20 per cent, we can see at once that the firm39。s overall business conditions and petition prospects e to embody. Specific assessment, the fixed costs to predict the total expenditures and cash flow trends, the fixed costs and discretionary spending is divided into some parts of constraints, in order to accurately estimate the pany39。s statement c) Of ratios between items in this period39。 Most of the other ratios reflect financial efficiency. Are the statements adequate in general?Before attempting parative analysis of given financial statements we wish to be sure that the statements are reasonably adequate for the purpose. They should, of course, be as plete as possible. They should also be of recent date. If not, their use must be limited to the period which they cover. Conclusions concerning 1923 conditions cannot safely be based upon 1921 statements. Does the parative balance sheet reflect a seasonable situation? If so, it is important to know financial conditions at both the high and low points of the season. We must avoid unduly favorable judgment of the business at the low point when assets are very liquid and debt is low, and unduly unfavorable judgment at the high point when assets are less liquid and debt likely to be relatively high. Does the balance sheet for any date reflect the estimated financial condition after the sale of a proposed new issue of securities? If so, in order to ascertain the actual financial condition at that date it is necessary to subtract the amount of the security issue from worth, if the. issue is of stock, or from liabilities, if bonds are to be sold. A like amount must also be subtracted from assets or liabilities depending upon how the estimated proceeds of the issue are reflected in the statement. Are the statements audited or unaudited? It is often said that audited statements, that is, plete audits rather than statements rubber stamped by cer