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Financial Statement Analysis for Investors

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Financial Statement Analysis for Investors
Financial Statement Analysis for Investors
Michael Price
MBA640: Accounting for Decision Making
Dr. Ulinski
December 11, 2012

Table of Contents:
Section I: Introduction (Page 3)
Section II: Literature Review (Page 4)
Section III: Methodology and Data Collection (Page 5)
Section IV: Results (Page 6)
a. Income Statement Analysis (Page 7)
b. Balance Sheet Analysis (Page 11)
c. Statement of Cash flow Analysis (Page 14)
Section V: Conclusion (Page 16)
a. Recommendation for Future Study (Page 16)
Section VI: Work Cited (Page 18)

Section I:
Introduction
The main purpose of the research paper is to support why financial statements are an important tool when analyzing a company as a potential investor or investment analyst. There is a lot of useful data in financial statements that can help provide insight into future success or failure for a business. Throughout research, there will be substantial support on how important it is for potential investors to use the data found in financial statements and how particular formulas should be used to help aid in investment analysis. Many investors fail to look at some of the most crucial pieces of data when basing their decision or they often fail to apply the data found in financial statements to future results. The research will show how data found in financial statements can be applied to predict how a company may fair going forward. The research was conducted on the balance sheet, income statement and statement of cash flow. Each has crucial information that can help determine the financial condition of a company and can tell in a different way, the suitability of a company for investment purposes.

Thesis
If an investor is planning to invest in a particular company, it is crucial for the investor to use the information found in the financial statements in order to make an educated investment decision. An investor can 't make an informed decision on suitability of an


Cited: 1. Kennon, Joshua. "Income Statement Analysis." About.com Investing for Beginners. N.p., n.d. . 2. Wild, John J., Kermit D. Larson, and Barbara Chiappetta. Fundamental Accounting Principles: 20th Edition. New York: McGraw-Hill/Irwin, 2011. Print. 3. Graham, Benjamin, and Charles McGolrick. The Interpretation of Financial Statements. New York: Harper & Row, 1975. Print. 4. Kennon, Joshua. " Analyzing a Balance Sheet." About.com Investing for Beginners. N.p., n.d. Web. 24 Nov. 2012. . 5. Krantz, Matt. "What Should Investors Focus on in Financial Statements?" USATODAY.COM. USA Today, 12 Jan. 2012. Web. 23 Oct. 2012. . 6. McClure, Ben. "Fundamental Analysis: The Cash Flow Statement." Educating the World about Finance. Investopedia, n.d. Web. 26 Nov. 2012. . 7. Wallick, S. H. "How to Analyze a Company 's Cash Flow Statement." Yahoo!, 20 May 2009. Web. 26 Nov. 2012. . 8. Janssen, Cory, Chad Langager, and Casey Murphy. "Technical Analysis: Moving Averages."Investopedia – Educating the World about Finance. Investopedia, n.d. Web. 8 Dec. 2012.
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