Financial Statements Analysis. Annual Reports and Financial Statements as the basic sources of financial analysis
Доклад, 23 Мая 2013, автор: пользователь скрыл имя
Описание работы
Horizontal analysis is a line–by-line comparison of financial information over a series of reporting periods;
Vertical analysis - the proportional analysis of a financial statement, where each line item on a financial statement is considered as a percentage of the total amount;
Trend analysis - analysis of changes of every items of financial statements over a series of reporting periods;
Ratio analysis- analysis of the financial ratios system
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The basic steps of financial statements analysis
- Step 1. Acquire the company’s financial statements for several years.
- Step 2. Quickly scan all of the statements to look for large or significant movements in specific items from one year to the next.
- Step 3. Review the notes accompanying the financial statements for additional information that may be significant to your analysis.
- Step 4. Examine the balance sheet. Look for large changes in the overall components of the company's assets, liabilities or equity.
- Step 5. Examine the income statement. Look for trends over time. Calculate and graph the growth of the following entries over the past several years.
- Step 6. Examine the cash flow statement, which gives information about the cash inflows and outflows from operations, financing, and investing.
- Step 7. Calculate financial ratios in each of the following categories, for each year.
- Step 8. Obtain data for the company’s key competitors, and data about the industry.
- Step 9. Review the market data you have about the company’s stock price.
- Step 10. Review the dividend payout.
- Step 11. Review all of the data that you have generated. Prepare a short conclusion.