ACCT 211 Chapter Notes - Chapter 12: Financial Statement Analysis, Asset, Financial Statement

• School: Binghamton University
• Department: Accounting
• Course: ACCT 211
• Professor: Elliot Kamlet

Document Summary

Financial statement analysis is the process of applying analytical tools to a company"s financial statements to understand the company"s financial health. The goal of such an analysis is to provide some context for understanding the accounting numbers on the financial statements. Should help an investor, creditor or any other interested party better understand a company"s financial position and therefore make better decisions about the company. Enabling good decisions is one goal of financial accounting, and it should be the product of financial statement analysis. All publicly traded companies must prepare audited financial statements each year and file them with the securities and exchange commission. These statements include the income statement, balance sheet, the statement of stockholders" equity and the statement of cash flows. Financial statements contain multiple years of data for comparative purposes and are the starting point for any analysis. In addition to financial statements, companies provide other information that should be consulted to augment a financial analysis.