Financial Statement Analysis (FSA) is the process of reviewing and evaluating an organization's financial statements to gain an understanding of its economic situation. Good FSA enables effective decision-making. For example, it plays an important role in understanding the potential risk and rewards of an investment.
Learning Outcomes of Financial Statement Analysis
- Analyze wealth creation through the Dupont framework.
- Prepare and analyze the Statement of Cash Flows.
- Understand some critical accounting issues and perform pro forma analyses.
- Understand earnings management.
- Forecast key variables.
- Build an integrated valuation model using the residual income framework.