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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Introduction to Financial Statement Analysis, Financial statement analysis, Finan-cial statement, Guide to Financial Ratios Analysis, Financial, Financial Forecasting Pro Forma Financial Statements, Financial analysis, Analysis, Financial leverage, Financial Analysis in Mergers and Acquisitions, Financial Statement Analysis in Mergers and Acquisitions, Financial Leverage on Financial Performance, FINANCIAL STATEMENT ANALYSIS & CALCULATION, Accounting and Finance for Business Analysis, RATIO ANALYSIS AND EQUITY VALUATION