Definition of Terms
Financial statements: are a summary of the financial condition and performance of Compass Group PLC, Toronto Dominion Bank, Harris Corp, Morgan Stanley, and Boeing Co, prepared by its management and in some cases reviewed by independent auditors. Their financial statements consist of the income statement, balance sheet, statement of cash flows, statement of stockholders equity, and related footnotes.
Financial ratio analysis: is one of several techniques used to analyze financial statements of Compass Group PLC, Toronto Dominion Bank, Harris Corp, Morgan Stanley, and Boeing Co in an effort to assess earning power, solvency, and earnings persistence. Financial ratio analysis of the content of the banks’ financial statements involves computing and analyzing ratios that use financial statement numbers. These ratios are divided into three categories: Profitability, solvency, and liquidity ratios. The DuPont Model was used as the take off point in showing the differences in return on equity and return on assets across time across companies.
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