A describe the roles of financial reporting and financial statement analysis;

Question 1

Analyze

Answer 1

Past leaders and present success

Question 2

Financial Reports: Purpose.

Answer 2

Eval firms, make decisions

Public (equities, subsidiaries, operating divisions, M&A)

Private (Private equity, Venture Capital)

Question 3

Bonds: debts and contracts. Ask…Can they pay back the covenant?

Answer 3

Debt and default risk (bond rating)

Liquidity and solvency

Question 4

Forecasting NI and CF

Answer 4

1. Input financial statement data

2. Predict