14

Analysis of Financial Statements

CHAPTER OBJECTIVES

This chapter will help the readers to:

  • Understand the nature and limitations of financial analysis.
  • Differentiate between inter-period and inter-firm comparison.
  • Prepare and analyse common size financial statements and indexed financial statements.
  • Compute and interpret various financial ratios.
  • Understand applications of ratio analysis using DuPont analysis and Z score.
  • Carry out detailed analysis of financial statements of companies.
14.1 INTRODUCTION

The focus of the book so far, has been on understanding the accounting process and contents of the financial statements—the balance sheet, the profit and loss statement, and the cash flow statement. This chapter will focus on the ...

Get Financial Accounting for Managers, 3e now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.

Start your free trial