Financial Anaysis For Managers
1.1 What types of questions can be answered by analyzing financial statements?
Would an investment generate attractive returns?- what is the degree of risk inherent in the investments-will cash flows be sufficient to service interest and principal payments to support the firm's barrowing needs-should existing investment holdings be liquidated-does the company provide a good opportunities for employment, and employee benefits-how well does this company compete in its op environment.
1.2 What is the difference between an annual report and a 10-k report?
Annual reports will refer to the information package published by U.S. companies primarily for shareholders and the general public. The Securities and Exchange Commission (SEC) requires large publicly held companies to file annually a 10-k report, which is generally a more detailed document and is used by regulators, analysts, and researchers.
1.3 What are the particular items an analyst should review and study in an annual report and what material should be read with caution?
Financial statements
Balance sheets
Income statements
Statements of stockholders' equity
Cash flows
Notes from financial statements
Supplementary information
Auditors report
Management discussion
Analysis of opportunity performance + financial condition
Five year summary of financial
1.4 What organization has legal authority to set accounting policies in the US? Does this organization write most of the accounting rules in the US? Explain
The Securities and Exchange Commission (SEC) has the legal authority to write accounting rules in the United States, however, they choose to delegate writing rules, for the most part, to the Financial Accounting Standards Board (FASB). The SEC plays a supportive role and at times will encourage FASB to write particular rules or make changes to policies.
1.5 Describe the financial statements that are contained in an annual report on form 10-k
Balance sheets
Assets
Liabilities
Stock holders’
Would an investment generate attractive returns?- what is the degree of risk inherent in the investments-will cash flows be sufficient to service interest and principal payments to support the firm's barrowing needs-should existing investment holdings be liquidated-does the company provide a good opportunities for employment, and employee benefits-how well does this company compete in its op environment.
1.2 What is the difference between an annual report and a 10-k report?
Annual reports will refer to the information package published by U.S. companies primarily for shareholders and the general public. The Securities and Exchange Commission (SEC) requires large publicly held companies to file annually a 10-k report, which is generally a more detailed document and is used by regulators, analysts, and researchers.
1.3 What are the particular items an analyst should review and study in an annual report and what material should be read with caution?
Financial statements
Balance sheets
Income statements
Statements of stockholders' equity
Cash flows
Notes from financial statements
Supplementary information
Auditors report
Management discussion
Analysis of opportunity performance + financial condition
Five year summary of financial
1.4 What organization has legal authority to set accounting policies in the US? Does this organization write most of the accounting rules in the US? Explain
The Securities and Exchange Commission (SEC) has the legal authority to write accounting rules in the United States, however, they choose to delegate writing rules, for the most part, to the Financial Accounting Standards Board (FASB). The SEC plays a supportive role and at times will encourage FASB to write particular rules or make changes to policies.
1.5 Describe the financial statements that are contained in an annual report on form 10-k
Balance sheets
Assets
Liabilities
Stock holders’