BUS 251 Lecture Notes - Lecture 12: Gross Margin, Cash Flow, Audit Evidence
16 Apr 2021
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Document Summary
It is the process of evaluating a company"s performance based on an analysis of their financial statement: statement of financial position/income/changes in equity/cash flows/ notes to financial statements. Including calculating ratios, looking at relationships within the financial statements, and comparing results with historical and industry benchmarks. Financial statement analysis help evaluate corporate performance and the risks related to investment or lending decisions involving the company. Provide signals about financial health, cash flows, operating efficiency, generate additional questions and point to areas that require even further analysis. What is the process for analyzing financial statements: determine the purpose and context of the analysis. Determine the questions that analysis will help answer like should we extend credit, should we invest. Help you make decisions regarding the types of info that you will need to gather and determine the tools or techniques that would best support this analysis: collect the info needed for the analysis.
