Kinds of financial statement analysis. This expert written guide goes beyond the usual gibberish and explore practical financial statement analysis as used by investment bankers and equity research analysts. Assets liabilities and ownership equity are listed as of a specific date such. Here i have taken colgate case study and calculated ratios in excel from scratch.
Managers securities analysts bankers and consultants all use them to make business decisions. Financial statement analysis can be applied from two different directions. In financial accounting a balance sheet or statement of financial position is a summary of the financial balances of an individual or organization whether it be a sole proprietorship a business partnership a corporation private limited company or other organization such as government or not for profit entity.
A comparative analysis of financial inclusion. Here we look up and down the statements for signs of strengths and weaknesses. If you can follow a recipe or apply for a loan you can learn basic accounting.
Financial statements are the basis for a wide range of business analysis. A study of nigeria and the uk. Financial ratios are useful tools that help companies and investors analyze and compare relationships between different pieces of financial information across an individual companys history an industry or an entire business sectornumbers taken from a companys income statement balance sheet and cash flow statement allow analysts to calculate several types of financial ratios for.
If you can read a nutrition label or a baseball box score you can learn to read basic financial statements. As of 28 february 2007 with amounts expressed in millions pick n pay had an ebit of r12546 income statement and average total assets of r727995 balance sheet. Download with google download with facebook or download with email.
The term is most often used in a more limited sense in trade and financial circles to refer to the balance sheet statement of income and. Vertical analysis is the application of financial statement analysis to one set of financial statements.