Analysis and evaluation of financial statements Flashcards
1
Q
what is horizontal analysis?
A
shows the changes between years in the financial data in both absolute numbers and percentage form
places side by side financial information from different years
2
Q
what is vertical financial statement analysis?
A
3
Q
what are the six categories of financial ratios?>
A
financial ratios
liquidity ratios
efficiency ratios
leverage ratios
coverage ratios
profitability ratios
4
Q
what are the limitations of financial statement analysis?
A
- single ratio provides very little information - may be misleading
- industry trends
- changes within the company
- consumer tastes
- economic factors
- technological changes
5
Q
what are the three types of stock recommendations made by a stock analyst>
A
buy
neutral sell
6
Q
A
