Ch. 3- Evaluating a firm 's Financial performance C 2002. Prentice Hall. Inc
Ch. 3 - Evaluating a Firm’s Financial Performance © 2002, Prentice Hall, Inc
Financial statement Analysis Are our decisions maXimIzing shareholder wealth
Financial Statement Analysis • Are our decisions maximizing shareholder wealth?
We will want to answer questions about the firm's Liquidity Efficient use of assets Leverage(financing) Profitability
We will want to answer questions about the firm’s • Liquidity • Efficient use of Assets • Leverage (financing) • Profitability
We will want to answer questions about the firm's Liquidity Efficient use of Assets Leverage (financin Profitability
We will want to answer questions about the firm’s • Liquidity • Efficient use of Assets • Leverage (financing) • Profitability
Financial ratios Tools that help us determine the financial health of a company. We can compare a companys financial ratios with its ratios in previous years(trend analysis) We can compare a companys financial ratios with those of its industry
Financial Ratios • Tools that help us determine the financial health of a company. • We can compare a company’s financial ratios with its ratios in previous years (trend analysis). • We can compare a company’s financial ratios with those of its industry