Overview of Financial Overview of Financial Statement AnalysisStatement AnalysisChapter I

Business Analysis•Business Analysis is an evaluation of a

company’s prospects and risks for the purpose of making business decisions.

•Types of business analysis include credit analysis and equity analysis.

•Other uses of business analysis include managers, M&A, financial management, directors, regulators, labor unions, and customers.

Components of Business Analysis

•Business Environment and Strategy Analysis

•Accounting Analysis•Financial Analysis•Prospective Analysis•Valuation

Financial Statements-Basis of Analysis

•Planning Activities•Financing Activities•Investing Activities•Operating Activities

Financial Statements

•Balance Sheet•Income Statement•Statement of Cash Flows•Statement of Shareholders’ Equity

Financial Statement Analysis Preview

•Comparative Financial Statement Analysis•Common-size Financial Statement

Analysis•Ratio Analysis•Cash Flow Analysis•Valuation: debt valuation and equity

valuation

The End