Financial Statement Analysis
A Practitioner's Guide
Chapter One
The Adversarial Nature of
Financial Reporting
Financial statement analysis is an essential skill in a variety of occupations
including investment management, corporate finance, commercial lending,
and the extension of credit. For individuals engaged in such activities,
or who analyze financial data in connection with their personal investment
decisions, there are two distinct approaches to the task.
The first is to follow a prescribed routine, filling in boxes with standard
financial ratios, calculated according to precise and inflexible definitions. It
may take little more effort or mental exertion than this to satisfy the formal
requirements of many positions in the field of financial analysis. Operating
in a purely mechanical manner, though, will not provide much of a professional
challenge. Neither will a rote completion of all of the "proper" standard
analytical steps ensure a useful, or even a nonharmful, result. S ... read full excerpt from Financial Statement Analysis: A Practitioner's Guide ebook
