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Introduction to Financial Analysis
Subject: Finance
Book Language: English
Audience: Undergraduate students
Created date: May 15, 2020
Updated date: June 1, 2022
Target Release Date: 2021-08-31
License:
- Attribution
- Non-Commercial
- Share Alike
Description:
Analyzing Financial Statements
The accountant produces two basic financial statements: the Balance Sheet and the Income Statement, which, to readers of the statements, are fraught with interpretive pitfalls. These difficulties are due to the fact that the accountant, in his reporting, must abide by “generally accepted accounting principles,” which are often arbitrarily conceived, subjectively selected among a plethora of choices, and
constituted by a body of
rules that is internally inconsistent. The student, manager, and investor must identify these strange idiosyncrasies in order to understand the true goings-on within the company. This text explains, in the most friendly and simple manner, how the statements are assembled and what obstacles one should look out for. The text also takes one through twenty essential financial ratios so that both business and financial issues can be investigated further still. Last, elementary forecasting is covered. In the end, the student and practitioner will acquire both a certain healthy skepticism with regard to the accountant’s end-product and a platform upon which to paint a true picture of the corporation. No prior knowledge of Accounting is assumed. Ample practice problems and solutions are provided.
The Time Value of Money
They say that “a bird in the hand is worth two in the bush.” Similarly, a dollar to be paid in a year is not worth the same as a dollar presently in one’s hand. What would you rather have? How much would the difference in values be? All financial transactions depend on the notion of interest, both discounted and compounded. Accordingly, we speak of “Present-” and “Future-Values.” This text will take the student, manager, or investor through the entire variety of Time Value problems using the most basic arithmetic. In the end, the student will be able not only to calculate Time Value problems, but to interpret complex problems as well so that s/he may make educated and informed decisions regarding money. No prior knowledge of Finance is assumed. Practice problems and solutions are provided.
Short Description:
An introductory text to the principles of finance for first year business and economic students
