ACCT 2101 Chapter Notes - Chapter 13: North American Industry Classification System, Financial Statement, Inventory Turnover
Document Summary
Investors are the largest group of people who use financial statements. Factors to consider when thinking of investing in stock - impact future income and growth potential. Economy-wide factors: health of the overall economy impacts the health of an individual company. Industry factors: factors that only impact companies within a specific industry. Individual company factors: understanding the context of a company - top to bottom. Business strategy -> operating decision -> transactions -> financial statements. 2 strategies for earning a high rate of return. Product differentiation allows companies to charge higher prices. Cost differentiation by offering lower prices as a result of operating more efficiently relative to their competitors. Learn about a companies business strategy by looking at the annual report or. You can see trends in a companies performance. North american industry classification system (naics) is used for reporting economic data on specific industries.
