ACTG 3000 Study Guide - Midterm Guide: Free Cash Flow, Cash Flow Statement, Operating Cash Flow
5 Oct 2016
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First develop an understanding of the context on 3 levels: the economy (global, national, where in the economic business life cycle are we? a. i. Expansion; overall business and economy demonstrate positive growth a. ii. Recession; overall business and economic growth stops or is negative a. iii. Recovery; overall business and economic growth is less negative than recession (seem to be pulling out of recession: the industry with respect to the economy, how does the industry respond to overall economic cycle? a. i. Growth; above normal expansion in sales and profits (ex. ipad) a. ii. Defensive; stable performance regardless of business cycle mature (ex. food, government) a. iii. Cyclical; profitability tracks business or other cycles (ex. restaurants, farms) a. iv. Decline; decreasing demand: the business and product. Understand what drives risk, profitability and competitive advantage. Business analysis steps: business strategy analysis a. b. Identifies key profit drivers and business risks and assess firms profit potential at qualitative level.
