Financial Statement Analysis

Financial Statement Analysis Thomas D. Robinson Axia College of Phoenix University A fiscal rehearsal is made up of a balance winding-sheet, income statement, statement of contain earnings, and a statement of change flows. The balance sheet reports on a companys assets, liabilities and net equity. An income statement, excessively known as profit and loss statement (P& antiophthalmic factor;L), reports a companys income, expenses, and profits. A statement of retained earnings explains the changes in a companys retained earnings, and a statement of cash flows reports the companys cash flow activities for example its operating, investing, and financing activities. Financial statements be the scoop source for businesses when they indigence record of how well they are doing fiscally, and there are limitations. Financial statements do not conduct any of the qualitative economic variables. Qualitative attri entirelyes such as the morale of the employee force or the quality of the management team are some of the critical factors that are relevant to the decisions and judgments that the financial statement user is making. The current accounting process has no way of measuring the nurture of these intangible assets.

Hence, even though the entitys human resources and information resources are its most valuable assets, they are ignored in the financial statements. Similarly trademarks and brand value of a company are not recorded as assets. Brand value of a company is built everyplace time and has a lot of economic value. (H. Yadalam, 2010) other limitations acknowledge: comparison of financial data, and looking beyond ratios. Sometimes companies screw compare financial statements to see the financial health of an organization, but since different companys use different methods to bushel a financial, this can some time prove to be difficult. Ratios are not enough themselves as a pedestal for judgment about the future, so financial statements leave the need to look beyond ratios. Items in common-size statements... If you want to get a full essay, order it on our website: Ordercustompaper.com

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