pps/discuss onboard d /message ?action = create&do-create;&requestType;: thread&

Question

pps/discuss onboard d /message ?action = create&do-create;&requestType;: thread& course d m1 1 8436-1&nam; discuss on board entry&cor; Indicates a required field. FORUM DESCRIPTION Financial analysis is a critical component to strategic planning and execution. We use both financial ratios and common-sized statements to find trends in financial performance. These trends can be found either across time (longitudinally) or in comparison to competitors (cross- sectionally). Describe how you would go about conducting longitudinal and cross-sectional financial analyses MESSAGE

Explanation / Answer

Sometimes it may be difficult to interpret which higher company is more risky or which is less risky by looking over the amount of liabilities. Sometimes the company with higher amount liabilities are more risky sometimes may not, same thing for company with lower amount of liabilities.

It is actually depends upon the size of the company and industry. The most useful way to analyze financial statements is to perform either vertical analysis or horizontal analysis which helps users to compare the performance of the companies of different sizes.

Horizontal analysis:

Cross sectional analysis (vertical analysis)

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.