文档介绍：Financial Statement Analysis
Main Contents
The major financial statements
Standard financial ratios
Ratio position analysis
Asset utilization parability problems
Accounting . Economic earnings
The Major Financial Statements
Accounting data are useful in assessing the economic prospects of the firm.
An investor can use financial data as inputs into stock analysis and estimate the intrinsic value mon stocks.
There are three basic sources of data:
The e statement
The balance sheet
The statement of cash flows
The Major Financial Statements
The e statement
Table
Is a summary of the profitability of the firm over a period of time such as a year.
Some terms
Revenue, expense, net earning or profit
Cost of goods sold, general and administrative expense, interest expense, tax on earnings
Operating revenue, operating cost, operating e, earning before interest & taxes (EBIT)
The Major Financial Statements
The balance sheet
Table
Provide a snapshot of the financial condition of the firm at a particular time.
Some terms:
Asset, liability, net worth or stockholder’s equity
Current asset, long-term asset
Current liability, long-term debt
Par value of stock, capital surplus(additional paid-in capital), retained earnings
The Major Financial Statements
The statement of cash flows
Table
A statement showing a firm’s cash receipts and cash payments generated by the firm’s operations, investments and financial activities during a specified period.
Accrual method of accounting . Transaction basic method
It provides evidence on the well-being of a firm.
Return On Equity (ROE)
Past ROE . Future ROE
ROE is one of the two basic factors in deter-mining a firm’s growth rate of earnings.
A high ROE in the past does not necessarily imply a firm’s future ROE will be high.
A declining ROE is evidence that the firm’s new investments have offer a lower ROE than its past investment.
It is expectations of future dividends and earnings that determine the intrinsic value of pany’s sto