Historical Performance Analysis
This chapter covers the basics of historical financial performance analysis. The learning objectives for this chapter are:
This chapter is introductory because it focuses on interpreting the metrics in a historical context—it's a preliminary step in our multistep analysis process. There are several good reasons to proceed in this manner. First, it's easier to learn how to analyze the metrics this way. Properly completing this stage of the analysis requires interpretation of more than two dozen indicators and a discounted free cash flow valuation model. As you gain proficiency in financial analysis and valuation, you will reach a point where you are able to simultaneously consider how the assumptions used to forecast the financial statements are affecting the forecasted metrics and the ...