About This Chapter
Financial Analysis & Reporting - Chapter Summary
Top instructors in this chapter provide all the information you need to gain full comprehension of financial analysis and reporting. Whether you want to study financial and income statements, profitability and debt ratios, the statement of cash flows or financial controls in law firms, you've reached the right place! Exploring our engaging lessons will improve your ability to:
- Define statement of retained earnings
- Explain the purpose of a balance sheet and a financial statement analysis
- Share the definition of liquidity and discuss the use of liquidity ratios and formulas in financial analysis
- List and describe different types of leverage ratios
- Use solvency ratios to analyze financial statements
- Identify and describe four standards for comparison in financial statement analysis
- Discuss break-even analysis and how to calculate target profit
- Detail the purpose of financial reporting
Select any lessons in this chapter to study, and feel free to visit as often as needed to improve your understanding of financial analysis and reporting. Our subject-matter experts can answer any questions you have about topics covered in the lessons. Use our mini quizzes and practice exam to find out how well you comprehend this chapter. Around-the-clock mobile access lets you study anytime using any smartphone or tablet with an Internet connection.
1. What Are Financial Statements? - Definition, Purpose & Importance
Financial statements are big players in the world of accounting. In this lesson, you will be introduced to each of the financial statements. You will also learn what their role is in the accounting industry, who they are important to and why they are important.
2. What Is an Income Statement? - Purpose, Components & Format
There are four financial reports that are created during the accounting cycle. These four reports make up what is commonly known as the financial statements. In this lesson, we will focus our attention on the income statement. We will learn what the income statement is, what its role in the financial statements is, and why it is important in accounting.
3. Statement of Retained Earnings: Definition, Formula & Example
Retained earnings are a critical part of the business life cycle. The statement of retained earnings calculates not only the cumulative amount of earnings but also the changes that have affected that amount during the past year.
4. The Balance Sheet: Purpose, Components & Format
There are four financial reports that make up a group known as the financial statements. We will take a walk with one of those reports - the balance sheet - and learn what it is, what items are included on it and what its role in the group is.
5. The Statement of Cash Flows: Purpose, Format & Examples
There are four financial reports that are required in financial statements. In this lesson, you will learn about the fourth and final report - the statement of cash flows. You'll learn what the makeup of the statement is, its purpose, and why it is important to users of the financial statements.
6. 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.
7. Using Liquidity Ratios & Formulas in Financial Analysis
In this lesson, we'll define liquidity and discuss three financial ratios to determine a company's liquidity: current, quick and operating cash. You'll also learn how to calculate and analyze the ratios.
8. Profitability Ratio: Definition, Formula, Analysis & Example
How do you know if a company is performing well? In this lesson, you'll learn about various profitability ratios, including what they mean, their formulas and examples illustrating them. A short quiz follows the lesson.
9. What Is Debt Ratio? - Calculation & Overview
In this lesson, you'll learn what a debt ratio is in accounting. You will also learn how to calculate a company's debt ratio and why it is important to financers and investors.
10. 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.
11. Analyzing Financial Statements using Solvency Ratios
In this lesson, we'll define solvency and learn about three solvency ratios: debt, equity, and debt to equity.We'll also learn how to analyze each ratio and determine if a high or low ratio is positive or negative.
12. 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.
13. Target-Profit & Break-Even Analysis
A business needs to know how many units to produce in order to cover its costs and make a profit. In this lesson, you'll learn about break-even analysis and calculating target profit.
14. What Is Financial Reporting? - Purpose, Statement Examples & Analysis
Financial reporting is a vital part of corporate governance. In this lesson, you'll learn what financial reporting is, its primary components, its purpose, and be provided with some examples. A short quiz follows the lesson.
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