Chapter 18
Assessing Financial Performance
IN THIS CHAPTER
Doing vertical, horizontal, and cross comparisons
Making comparisons over time and against the industry
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 the corporation is financially successful. That piece of information is worth knowing. Is the corporation you are 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 prison? Whether you are an investor, a manager, a regulator, an employee, a supplier, a partner, a competitor, or just some schmuck who writes introductory corporate finance books, it's good to stay out of prison!
In this chapter, I explain how to evaluate whether a corporation is managing its finances effectively and whether it’s improving over time.
Analyzing Financial Success
Determining how financially ...
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