How to Analyze Financial Statements | 2nd Edition

There are some basic questions that an investor or a shareholder would have in mind while going through the financial statements of a firm:

• What are the types of assets of an entity? How valuable are they? Can they be liquidated easily or will they become a risk for the entity over time?
• What is the value of the debt of an entity in concern? How risky would it be for the entity?
• What is the value of equity? How can it be of use to an entity?

This new edition answers all such queries that are universal to any firm in the world: from explaining the steps to analyze financial statements to analyzing their solvency ratios. However, this time, the readers will also be able to read and understand the index-based common size figures of real-life companies and analyze their solvency position. This book covers different types of analysis through numerical financial figures as well as financial ratios. This analysis if further followed by comparison between different firms in concern, tallying their profitability quotient over a certain period. For better understanding, data from recent years of a few real-life companies has been accumulated and interpreted in an easy version.

Table of Contents:

Preface

Acknowledgements

• Financial Statements – An Introduction
• Common Size Analysis
• Index Based Analysis
• Financial Statement Analysis Using Ratios
• Comparison Using Financial Ratios
• Solved Illustrations

Exercises

Index