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Q, Ex Q1-3
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Financial Statement Analysis and Valuation 6th Edition

Financial Statement Analysis and Valuation (6th Edition)

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Book Edition6th Edition
Author(s)Easton, McAnally
ISBN9781618533609
PublisherCambridge Publishing , Inc.
SubjectFinance
End of Chapter
Questions
Mini Exercises
Exercises
Analysis Discussion Points

Chapter 1, End of Chapter, Questions, Exercise Q1-1

Page 1-36

Explanation

A financial statement contains the cash flow statement, the income statement and the balance sheet of the business. All the three produce the healtha nd performance of the firm.

Verified Answer

Four basic activities firm engage in are-

  • Plan activities
  • Finance those activities
  • Invest in those activities 
  • Engage in operating activities

Financial statements which include income statement, balance sheet and cash flow statement-

  • Plan activities- Cash flow statement
  • Finance those activities- Balance sheet
  • Invest in those activities- Balance sheet
  • Engage in operating activities- Cash flow statement

Financial statements can help to plan the activities, help to invest in the right activities and also how to get the financing done.

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Page 1-36