Analysis of Financial Statements - Business Finance - ثاني ثانوي

190 1,089 2,471,435 5,796 1,076,228 2,478, 5,644 17,381 1,153,067 412,445 2,369,083 2,135,554 2,363,129 3 339,254 2,333,115 12 Analysis of Financial Statements 1,969,302 1,639,242 532,612 108,738 2,489,980 839,769 615.965 1,943,053 2,420.776 1,214,566 787.347 1005645 1,155 ? Why is it important for companies to accurate financial is the job of employees in the Finance department to keep a range of financial records for their firm. 2,125 1,707 1,32 1,9 04

39,578 +04 200 187,740 919 181,381 109,806 47,647 ar 188,792 39,233 203,297 100.00 150.0 LEARNING OBJECTIVES Once you have completed this chapter, you should be able to: 99.676 41,558 50 000 154,246 205,438 1 Understand the basic principles of financial statements: what they are. D 192.055 53.076 88.317 43.647 who uses them, and the information they convey. 502890 118.363 030 123,783 2 ΤΣ 23,157 218841 129,657 134.05 229574 189.254 3 are constructed. Recognize and understand the different components of commonly-used financial statements. Understand how financial statements 712 404 3,466 1,564 70,456 552,231 861,914 ,432,610 1,491,925 1,389,97 Understand the basic analyses that 4 underite common financial statements. 5 Recognize the limitations inherent in financial reporting. 83

P 84 Business Finance very day, companies are working to offer goods and services to their markets and make a profit for themselves in the process. How can you tell if a company is doing well, making a profit, or in financial difficulty? To help managers, accountants, bankers, analysts, regulators, and investors understand a firm's situation, financial statements are regularly prepared. A financial statement is a formal record of the financial and operating activities of a business or other entity. Financial statements are used to convey information about the business activities and financial status of the firm they are prepared for. These statements have been designed to present their data in a structured manner and in a format that is easy to understand (once you are familiar with how they are constructed). Just as all companies differ in terms of their performance and financial health, the data presented in each financial statement will vary from company to company. The goal of these documents is to provide an objective insight into the organization. They are also used to monitor a company's performance over time, understand how a company is progressing toward key strategic initiatives, and to compare its performance to other.companies in the same industry. Financial statements are regularly audited by government agencies, accountants, banks, and others, to ensure accuracy and for tax, financing, or investing purposes. Financial statement analysis is the process of reviewing a company's financial documents to make an informed decision about that business. For example, a company that is seeking financing from a bank will submit its financial statements as part of its loan application. The bank will analyze the statements to determine the creditworthiness of the firm.