CHAPTER 14
Financial Analysis and Long-Term Financial Planning
Chapter Learning Objectives:
AFTER STUDYING THIS CHAPTER, YOU SHOULD BE ABLE TO DO THE FOLLOWING:
- Describe what is meant by financial statement analysis.
- Describe the five basic types of financial ratios.
- Indicate what is meant by DuPont analysis and indicate its major components.
- Explain the importance of the quality of financial statements.
- Describe the link between asset investment requirements and sales growth.
- Describe how internally generated financing occurs.
- Describe how additional external financing requirements are determined.
- Describe the cost-volume-profit analysis concept.
Where We Have Been...
The previous chapter introduced the three basic financial statements and some basics of accounting, which is the language of business. Not only do financial market participants, such as bondholders, shareholders, and bankers analyze the financial statements, but the firm's managers also help them analyze their own firms and their firm's competition as well as plan for future strategies and financing needs.
Where We Are Going...
A myriad of financial market participants will use and analyze financial statement information, ...
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