FSA1 - Financial Statement Analysis Module 1 CHAPTER...

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Financial Statement Analysis (FSA) – Module 1 Pg 1 Introduction to Accounting I Professor Marc Smith CHAPTER 1 MODULE 1 Financial Statement Analysis Module 1 Financial Statement Analysis Involves the examination of both the relationships among financial statement numbers and the trends in those numbers over time. Purposes of financial statement analysis: 1. Use the past performance of a company to predict how it will do in the future. 2. Evaluate the performance of a company with an eye toward identifying problem areas. Financial Statement Analysis – Module 1 Financial Statement Analysis – Module 1 Financial statements are not presented in isolation. Every financial statement issued is accompanied by the corresponding financial statement of the preceding year, and often the previous two years. These are called comparative financial statements. The comparative financial statements help users detect and predict trends. Financial Statement Analysis – Module 1 Horizontal analysis, also called trend analysis, is a technique for evaluating a series of financial statement data over a period of time.
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FSA1 - Financial Statement Analysis Module 1 CHAPTER...

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