12 FINANCIAL ANALYSIS: THE BASICS
OBJECTIVES
When you have studied this chapter you should be able to:
- explain the limitations on the amount of useful information about a business or other organisation that can be conveyed by a single set of accounts in isolation;
- describe some of the most commonly used financial ratios;
- list the various contexts that give them meaning;
- explain what is meant by ‘shareholder value added’ (SVA) as applied to a company as a whole.
FINANCIAL ANALYSIS
In Chapter 1 I suggested that statements of financial position and income statements are static and, by themselves, tell us little about the dynamics of a business. In this chapter we shall see how financial ratios can bring accounts to life and reveal some of the ...
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