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Investment Banking: Core Concepts
Financial Statement Analysis
The systematic process of evaluating a company's financial statements to assess its past performance, present condition, and future prospects. ✨
Article Points:
1
Analyzes the Income Statement (profitability), Balance Sheet (financial position), and Cash Flow Statement (cash generation).
2
Uses ratio analysis (profitability, liquidity, solvency, efficiency) to derive insights.
3
Trend analysis (horizontal) compares metrics over time; common-size analysis (vertical) compares within a period.
4
Key focus areas include revenue growth, margins, debt levels, and cash conversion.
5
Identifies red flags like declining cash flow, aggressive accounting, and high leverage.
6
Essential for investors, creditors, and management to make informed economic decisions.
Source:
Financial Statement Analysis
Financial Statement Analysis
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Source:
Financial Statement Analysis
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