Ebook Business Analysis and Valuation: Using Financial Statements (second edition)

The purpose of this chapter is to outline comprehensive framework for financial statement analysis. Because financial statements provide the most widely available data on public corporations’ economic activities, investors and other stakeholders rely on financial reports to assess the plans and performance of firms and corporate managers. A variety of questions can be addressed by business analysis using financial statements, as shown in the following examples: • A security analyst may be interested in asking: “How well is the firm I am following performing?...