About This Chapter
Financial Statement Analysis in Accounting - Chapter Summary and Learning Objectives
Good accounting requires a regular and thorough analysis of financial statements. In this chapter, you will learn about the proper procedures for analyzing such statements. The lessons go into specific detail on things like different analysis methods and issues that may arise during the process. Take short, end-of-lesson quizzes to measure how well you know the material and feel free to contact an instructor with any questions. These lessons cover such topics as:
- How to compare financial statements
- Horizontal vs. vertical analysis
- Financial ratio analysis
- The differences between efficiency and leverage ratios
|Financial Statement Analysis: Definition, Purpose, Elements & Examples||Get the basic facts on financial statement analysis.|
|Standards for Comparison in Financial Statement Analysis||Learn the fundamentals about comparisons in analyzing financial statements.|
|Applying Horizontal Analysis Methods||Discover how to analyze using horizontal methods.|
|Applying Vertical Analysis Methods||See how to apply vertical methods to analysis.|
|Defining and Applying Financial Ratio Analysis||Find out the specifics of financial ratio analysis.|
|Commonly Used Financial Ratios||Learn about various financial ratios that are commonly used in analysis.|
|Efficiency Ratios: Types & Formula||Discover the details of efficiency ratios.|
|Leverage Ratios: Types & Formula||Take a look at how leverage ratios are helpful in analyzing financial statements.|
|Issues with Financial Statement Analysis||Examine some issues that can arise during analyzation.|
1. Financial Statement Analysis: Definition, Purpose, Elements & Examples
In this lesson, we'll define financial statement analysis and discuss the main categories. You'll also learn how to calculate a financial ratio in each category and analyze the results.
2. Standards for Comparison in Financial Statement Analysis
In this lesson, you'll understand the purpose of comparing ratio data. We'll discuss four standards in comparing ratios, you'll learn about ratios in each category and where to find the data.
3. Applying Horizontal Analysis Methods
In this lesson, we'll define horizontal analysis. You'll learn about the most widely used financial statements to complete the analysis. We'll also discuss how to calculate horizontal analysis and interpret the results.
4. Applying Vertical Analysis Methods
In this lesson, we'll define vertical analysis. You'll learn about the most widely used financial statements to complete the analysis. We'll also discuss how to calculate vertical analysis and interpret the results.
5. Defining and Applying Financial Ratio Analysis
In this lesson, we'll define financial ratios. You'll learn the three main categories of financial ratios, and we'll show an example of each. We'll also discuss an analysis of each example.
6. Commonly Used Financial Ratios
In this lesson, we'll explore three of the most commonly used financial ratios. We'll also discuss the categories of each, how to calculate each, and how to analyze the data.
7. Efficiency Ratios: Types & Formula
In this lesson, we'll define efficiency ratios and discuss three examples of efficiency ratios: inventory ratio, days sales in inventory, and asset turnover ratio. You'll also learn how to calculate and analyze these ratios.
8. Leverage Ratios: Types & Formula
In this lesson, we'll define leverage. We'll review three types of financial leverage ratios: debt ratio, debt-to-equity ratio, and interest coverage ratio. You'll also learn how to calculate and analyze the results.
9. Issues with Financial Statement Analysis
In this lesson, we'll define financial statement ratios. You'll also learn some of the issues in analyzing financial statement ratios, as well as suggestions on how to make sure you're comparing apples to apples.
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Other chapters within the Accounting 101: Financial Accounting course
- Introduction to Accounting
- Financial Statements in Accounting
- Mechanics of the Accounting Cycle
- Adjusting Accounts and Preparing Financial Statements
- Internal Controls in Accounting
- Merchandising Operations and Inventory in Accounting
- Receivables in Accounting
- Completing the Operating Cycle in Accounting
- Long-Term Assets in Accounting
- Current and Long-Term Liabilities in Accounting
- Reporting & Analyzing Equity in Accounting
- Statement of Cash Flows in Accounting
- Studying for Accounting 101