Transcription of 7 FINANCIAL ANALYSIS AND INTERPRETATION
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-.,7 FINANCIAL ANALYSIS ANDINTERPRETATIONI ntroductionSome ProblemsHow to ProceedFinancial Ratios-Sales-Profitability-Asset Management- FINANCIAL Structure-Liquidity Management-Expense AnalysisDuPont s Profitability ModelSources and Uses of FundsPercentage and Trend AnalysisComparative AnalysisFundamental AnalysisSummaryIntroductionFinancial ANALYSIS is the process of taking accounting and other FINANCIAL data andorganising them into a form which reveals a firm s strengths and weaknesses. Byhighlighting these areas, the users of FINANCIAL information can then make moreinformed decisions about the ANALYSIS undertaken will depend upon the needs of the user. If a supplier wantsto know if their bills will be paid, emphasis will be placed on the liquidity part ofthe ANALYSIS . If a banker is being asked for a loan, liquidity and level of debt will beexamined. Equity investors will require a more in-depth ANALYSIS into the Management and Decision Makingsoundness of the investment.
Chapter 7: Financial Analysis and Interpretation 111 analysis. These analysis techniques are examined below, while at the same time acknowledging the problems and limitations of the input data.
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Guide to Financial Ratios Analysis, Guide, 16 Financial Ratios for Analyzing a, Financial, Analysis, Introduction to Financial Statement Analysis, Finan-cial, Chapter Financial Analysis 18, Financial analysis, Financial Forecasting Pro Forma Financial Statements, Financial Statement Analysis, FINANCIAL STATEMENT ANALYSIS & CALCULATION