Mastering Financial Modelling in Microsoft Excel 3rd edn, 3rd Edition

6

Analysing performance

Introduction

Profit and loss

Balance sheet

Ratios

Trend analysis

Sustainability

Summary

INTRODUCTION

This chapter introduces models for reviewing performance and understanding financial information. Companies produce reports for shareholders in widely different forms and models provide frameworks for understanding the financial performance and allowing comparison between similar companies. The starting point is the publicly available information that organisations produce in the form of annual reports. Annual reports for public companies consist of the following sections:

• Directors’ report – qualitative report of the previous accounting period.
• Auditor’s report – third-party report on the results.
• Profit and loss ...