How To Analyze A Financial Statement

1. Financial Statements - An Introduction

n  Steps to Analyze Financial Statements

n  Relation and Comparison of Accounting Data

2. Common Size Analysis

n  Common Size Profit & Loss Statement

n  Common Size Balance Sheet

n  Comparison of Common Size Statements

3. Index Based Analysis

n  Index Based Balance Sheet

n  Index Based Profit & Loss Statement

n  Comparison of Index Based Statements

4. Financial Statement Analysis Using Ratios

n  Profitability Ratios

n  Solvency Ratios

5. Comparison Using Financial Ratios

n  Short-Term Solvency Position

n  Operating Cycle Efficiency

n  Long-Term Solvency Position

n  Profitability and its Components

n  Use and Reliability of Financial Tools

n  Hidden Assumptions

n  Conceptual Diversity

Overview

There are some basic questions that an investor or a shareholder would have in mind while going through the financial statements of a firm:

Ø  What are the types of assets o