14 Financial Analysis
Objectives and Learning Outcomes
This chapter introduces basic methods of financial analysis which are used by managers to draw insight from financial data about a business and its activities. Two major families of methods of financial analysis are introduced in this chapter: the first is the application of financial ratios to data typically contained in the financial statements introduced in Chapter 13. The second is cost-volume-profit analysis, also known as breakeven analysis, which forms a versatile methodology to model the relationship between the scale or level of activity and financial parameters such as revenue, cost, and profit. This chapter aims to achieve the following specific ...
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