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Basics of Financial Analysis - Session 4

Financial statements provide key information about a company's financial health and performance. They should be analyzed to understand a company's liquidity, profitability, efficiency, and leverage over time as compared to industry peers. Key items to examine include notes to accounts, stock valuations, depreciation, amortization, diluted EPS, and classification of financial ratios.

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48 views

Basics of Financial Analysis - Session 4

Financial statements provide key information about a company's financial health and performance. They should be analyzed to understand a company's liquidity, profitability, efficiency, and leverage over time as compared to industry peers. Key items to examine include notes to accounts, stock valuations, depreciation, amortization, diluted EPS, and classification of financial ratios.

Uploaded by

api-19974928
Copyright
© Attribution Non-Commercial (BY-NC)
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Download as PPT, PDF, TXT or read online on Scribd
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Basics of Financial Statement

Analysis

A> Understanding of Financial Statements

Ability to read financial statements from an Annual Report


Significance of Notes to accounts
Special item treatments: Stock Valuation, Depreciation and Amortization,
Exclusion of Extraordinary items, Diluted EPS (Eg- Stock Options,
Convertibles Bonds)*weighted avg number of shares

B> Objective behind Ratio Analysis

Cross-sectional Analysis: Company Vs Industry Average


Time-Series Analysis: For growth rates or margins over a time peroid
Classification of Ratios: Liquidity, Profitability, Efficiency, Leverage

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