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Final Accounts Analysis Application Notes

Accounting Notes > Accounting (Special Edition) Notes

This is an extract of our Final Accounts Analysis Application document, which we sell as part of our Accounting (Special Edition) Notes collection written by the top tier of Acca students.

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Final Accounts Analysis - Applications http://www.youtube.com/watch?feature=player_embedded&v=kdxx0ps8VQE

Definition Financial Statement Analysis is the process of evaluating businesses to determine their suitability for investment. In other words Financial statement analysis is used to analyze whether an entity is stable, solvent, liquid, or profitable enough to be invested in. When looking at a specific company, the financial analyst will often focus on the income statement, balance sheet, and cash flow statement. In addition, one key area of financial analysis involves extrapolating the company's past performance into an estimate of the company's future performance. Why is it important?
Financial Statement Analysis is helps in the decision making process such as evaluating past performance, projecting future performance, forecasting profits, forecasting cash flows, Investment screening etc. Lecture Notes Financial Statement Analysis The application of the above can be found in different areas like:
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evaluating past performance projecting future performance forecasting profits credit assessment credit scoring forecasting cash flows Investment screening Evaluating Past Performance

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Many things are highlighted under this like the causes of change in key ratios major aspects necessary for competitive advantage business model and strategies

Projecting future performance Future performance can be forecasted on the results from financial statement analysis like expected sales, GDP growth

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