Analysis and Interpretation of Financial Statements

Learning objectives

After studying this chapter, you should be able to:

Describe and explain the objectives of financial statement analysis.
Describe the sources of information for financial statement analysis.
Calculate and explain changes in financial statements using horizontal analysis, vertical analysis, and trend analysis.
Perform ratio analysis on financial statements using liquidity ratios, long-term solvency ratios, profitability tests, and market tests.
Describe the considerations used in financial statement analysis.