Chapter 01
Chapter 01
Chapter 01
Statement Analysis
1
CHAPTER
Business Analysis
Management &
Control Labor Negotiations
Types of
Business Director Oversight
Regulation Analysis
Mergers, Acquisitions
& Divestitures
Credit Analysis
Creditors
Liquidity Solvency
Ability to meet short- Ability to meet long-
term obligations term obligations
Focus: Focus:
Current Financial Long-term financial
conditions conditions
Current cash flows Long-term cash flows
Liquidity of assets Extended profitability
Equity Analysis
Assessment of downside risk and upside
potential
Industry Strategy
Analysis Analysis
Financial
Analysis
Analysis
Accounting of Sources Prospective
Analysis Profitability
&Uses of Risk Analysis
Funds Analysis
Analysis
Business Environment
& Strategy Analysis
Accounting Analysis
Financial Analysis
Intrinsic Value
Dynamics of Business Activities
Business Activities Time
Beginning of per
Investing Financing
Planning
Operating
Planning
Investing Financing
End of period
Business Activities
Competition Pricing
Opportunities Obstacles
Business Activities
Financing activities
Owner (equity)
Nonowner
(liabilities)
Financing
Business Activities
Investing activities
Buying
resources
Selling
resources
Investing Financing
Investing = Financing
Business Activities
Planning
Investing Activities Financial
Activities Activities
Operating Activities
Revenues and expenses from providing
goods and services
Financial Statements Reflect Business Activities
Planning
Investing Financing
Current: Operating Current:
Cash
Notes Payable
Sales
Accounts
Accounts Payable
Cost of Goods Sold
Receivable
Salaries Payable
Selling Expense
Inventories
Income Tax
Administrative
Marketable Payable
Expense
Securities
Interest Expense Noncurrent:
Noncurrent:
Income Tax Expense
Bonds Payable
Land, Buildings, & Net Income
Common Stock
Equipment
Retained Earnings
Patents Liabilities & Equity
Income statement
Investments
Assets Cash Flow Balance Sheet
Balance Sheet
Income Statement
Statement of
Shareholders’ Equity
Statement of Cash Flows
Balance Sheet
Dell Financing
(in $billions)
Dell Profitability
(in $billions)