FINA3314- Financial Statement Analysis
Revision Chapter 1
According to the textbook "Business financial statements have the potential for being
both; map and maze." Explain what this means.
According to the textbook "Financial statement and their accomp
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8) Explain the key distinctions between depreciation, amortizations, and
Depreciation and Amortization are the Cost of assets other than land that will
benefit a business enterprise for more than a year is allocated over the assets
Q1: When are the financial statements consolidated?
When a parent owns more than 50% of the voting stock of a subsidiary, the financial statements are
combined for the companies even though they are separate legal entities.
Q2: What benefits are derived b
Q8. Explain the difference between straight line method the accelerated method, which of
these method is commonly used by US companies.
Ans: Straight line method is an accounting procedure under which equal amounts of expense
are apportioned to each year
What types of information are necessary to evaluate a company but cannot be found
in the financial statements?
Ans: Employee relations with management
Morale and efficiency of employees
Reputation of the firm
Firms prestige in the community
1. What is the difference between a multiple-step format and a single-step format of the
earning statement? Which format is the most useful to the analyst?
Multiple step format provides several intermediate profit measures prior to the amount of net