FIN401- Chapter 14

FIN401- Chapter 14 - Chapter14: FinancialStatementAnalysis

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Chapter 14:  Financial Statement Analysis
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Fundamental Analysis Last step in top-down approach is  Company  analysis Fundamental analysis calls for the  estimation of  intrinsic (fair) value Determine  value justified by fundamentals
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Accounting Aspects of Earnings Financial statements provide   financial  information about firms Analysis implies  comparison over time or  with other firms in the industry Focus on how statements are used
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Financial Statements Balance sheet     » Shows the  assets, liabilities, and owner’s equity   of  the firm    » Picture at  given point
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Financial Statements Income statement     » Represents  flows for a particular period    » Four broad classes:  Cost of goods sold  General and administrative expenses  Interest expense  Taxes on earnings
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Financial Statements Statement of cash flows » Indicates the  sources and uses of cash  during  a period » Recognizes only transactions in which  cash  changes hands
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What Investors Can Do Smart investors  look behind the basic numbers  and 
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This note was uploaded on 12/10/2011 for the course FIN 401 taught by Professor Staff during the Spring '08 term at Miami University.

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FIN401- Chapter 14 - Chapter14: FinancialStatementAnalysis

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