From our third class we got to learn these Topics: 1. Sustainable Income and Discontinued Operations: - Sustainable income is a company's income, excluding unusual revenues, expenses, gains, and losses. It represents the most likely level of future income. - Discontinued operations refer to the disposal or termination of a significant component of a business. It includes income/loss from operations and gain/loss on the disposal of assets. 2. Horizontal Analysis (Trend Analysis): - Horizontal analysis compares financial numbers over time to identify trends. 3. Vertical Analysis (Common-Size Analysis): - Vertical analysis expresses financial items as a percentage of a base amount. - It helps identify the proportion of each item in relation to the base, aiding decision-making and cost management. 4. Ratio Analysis: - Price-to-Earnings (P/E) ratio is used by value investors to assess buying opportunities. UCW Bookstore's P/E ratio was calculated to compare it with SFU Bookstore's P/E ratio. - Return on Assets (ROA) and Return on Equity (ROE) measure a business's profitability relative to its assets and shareholders' equity, respectively. - Turnover ratios (inventory turnover and accounts receivable turnover) assess how efficiently a company manages its inventory and collects receivables. The financial statement analysis helps identify trends, strengths, and weaknesses in the UCW Bookstore's operations. It revealed a significant growth in net income driven by the service department. The analysis highlights areas for improvement, such as exploring strategies to boost sales revenue, managing rapid growth in the service department, and optimizing inventory and accounts receivable turnover. Understanding financial ratios enables investors to make informed decisions regarding investment opportunities.

Conclude it and analyse what type of ratios are more useful in making decisions about business.