Chapter 18
Assessing Financial Performance
In This Chapter
Doing vertical, horizontal, and cross comparisons
Making comparisons over time and against industry competitors
Judging the quality of earnings
Calculating how well investments are paying off
You can analyze a corporation in many ways — by looking at its cash flows, equity, debt, assets, and so forth — but one important consideration is whether or not the corporation is actually financially successful. That piece of information is worth knowing. Is the corporation you’re looking at primed to be the next shooting star destined to be a global sensation, or is it doomed to suffer a fate that will land everyone associated with its operations in a North Korean prison camp? Okay, maybe that’s a bit of an exaggeration, but it’s still important to know whether or not a particular corporation is financially successful, whether you’re an investor, a manager, a regulator, an employee, a supplier, a partner, a competitor, or just some schmuck who writes introductory corporate finance books.
In this chapter, I explain how to evaluate ...
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Read now
Unlock full access