ANALYSIS AND
INTERPRETATION OF
FINANCIAL STATEMENTS
DAC 501
, Defining Financial (Statement)
Analysis
Financial analysis is the process of
evaluating financial and other
information for decision-making.
A six-step approach is suggested
for systematic financial analysis.
, The Steps of Analysis
1. Identify Purpose of Financial
Analysis
2. Corporate Overview
3. Financial Analysis Techniques
4. Detailed Accounting Analysis
5. Comprehensive Analysis
6. Decision or Recommendation
, 1 .Identify Purpose of Financial Analysis
Different stakeholders will have
varied objectives in analyzing
financial statements.
A lender for example may be
interested in liquidity whereas an
investor may be interested in
profitability and long term survival
INTERPRETATION OF
FINANCIAL STATEMENTS
DAC 501
, Defining Financial (Statement)
Analysis
Financial analysis is the process of
evaluating financial and other
information for decision-making.
A six-step approach is suggested
for systematic financial analysis.
, The Steps of Analysis
1. Identify Purpose of Financial
Analysis
2. Corporate Overview
3. Financial Analysis Techniques
4. Detailed Accounting Analysis
5. Comprehensive Analysis
6. Decision or Recommendation
, 1 .Identify Purpose of Financial Analysis
Different stakeholders will have
varied objectives in analyzing
financial statements.
A lender for example may be
interested in liquidity whereas an
investor may be interested in
profitability and long term survival
