introduction to financial statement analysis

《introduction to financial statement analysis》由会员上传分享，免费在线阅读，更多相关内容在工程资料-天天文库。

1、IntroductiontoCHAPTERFinancialStatementAnalysis2SWEDISCUSSEDINCHAPTER1,ONEOFTHEGREATadvan-Atagesofthecorporateorganizationalformisthatitplacesnorestrictiononwhocanownsharesinthecorporation.Anyonewithmoneytoinvestisapotentialinvestor.Asaresult,corporations

2、areoftenwidelyheld,withinvestorsrangingfromindividualswhohold100sharestomutualfundsandinstitutionalinvestorswhoownmillionsofshares.Forexample,in2012,InternationalBusinessMachinesCorpora-tion(IBM)hadabout1.2billionsharesoutstandingheldbynearly600,000shareh

3、olders.Mostshareholdersweresmall.WarrenBuffett’sBerkshireHathawaywasthelargestshareholderwithabouta6%stake.Lessthan1%ofthecompanywasownedbyinsiders(IBMexecutives).Althoughthecorporateorganizationalstructuregreatlyfacilitatesthefirm’saccesstoinvestmentcapi

4、tal,italsomeansthatstockownershipismostinvestors’soletietothecompany.How,then,doinvestorslearnenoughaboutacompanytoknowwhetherornottheyshouldinvestinit?Howcanfinancialmanagersassessthesuccessoftheirownfirmandcompareittotheperfor-manceofcompetitors?Onewayf

5、irmsevaluatetheirperformanceandcom-municatethisinformationtoinvestorsisthroughtheirfinancialstatements.Firmsissuefinancialstatementsregularlytocommunicatefinancialinformationtotheinvestmentcommunity.Adetaileddescriptionofthepreparationandanalysisofthesest

6、atementsissufficientlycomplicatedthattodoitjusticewouldrequireanentirebook.Here,webrieflyreviewthesubject,emphasizingonlythematerialthatinvestorsandcorporatefinancialmanagersneedinordertomakethecorporate-financedecisionswediscussinthetext.Wereviewthefourm

7、aintypesoffinancialstatements,presentexamplesofthesestatementsforafirm,anddiscusswhereaninvestorormanagermightfindvarioustypesofinformationaboutthecompany.Wealsodiscusssomeofthefinancialratiosthatinvestorsandanalystsusetoassessafirm’sperformanceandvalue.W

8、eclosethechapterwithalookatafewhighlypublicizedfinancialreportingabuses.2122Chapter2IntroductiontoFinancialStatementAnalysis2.1Firms’DisclosureofFinancialInformationFinancialstatementsareaccountingreportswithpastper