ACCTG 101 Lecture Notes - Lecture 21: Financial Statement, Current Asset, Income Statement
Document Summary
Financial investments: assume apple inc. "s common stock is trading at per share. Airlines, kmart, polaroid, and planet hollywood, share the common characteristic of having once declared bankruptcy: obviously, being well known is not necessarily a sufficient basis for an investment decision. Knowledge that a company has a good product, by itself, may also be an inadequate basis for investing in the company. Investors can use analytical procedures to examine relations between items included with a single company"s financial statements. Analytical procedures are also widely used to examine financial statement information across time and across companies. Common analytical measures are not ends in themselves, but tools for evaluating financial and operating data. Many other factors, such as industry trends and general economic conditions, can play important roles in making investment decisions. Basic analytical procedures: horizontal analysis: although financial statement line items can be analyzed as dollar amounts, expressing amounts as percentages can facilitate comparison and interpretation.
