Overview of Financial Statement Analysis Chapter I.

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Presentation transcript:

Overview of Financial Statement Analysis Chapter I

Business Analysis Business Analysis is an evaluation of a company’s prospects and risks for the purpose of making business decisions. Types of business analysis include credit analysis and equity analysis. Other uses of business analysis include managers, M&A, financial management, directors, regulators, labor unions, and customers.

Components of Business Analysis Business Environment and Strategy Analysis Accounting Analysis Financial Analysis Prospective Analysis Valuation

Financial Statements-Basis of Analysis Planning Activities Financing Activities Investing Activities Operating Activities

Financial Statements Balance Sheet Income Statement Statement of Cash Flows Statement of Shareholders’ Equity

Financial Statement Analysis Preview Comparative Financial Statement Analysis Common-size Financial Statement Analysis Ratio Analysis Cash Flow Analysis Valuation: debt valuation and equity valuation

The End