1. What is Financial Reporting

Communication of financial information useful for making investment, credit, and other business decisions

2. What are the Standards of Comparason

Intracompany- Looking within at its own records

Competitor- Direct competitors can provide standards of comparasion

Industry-Statistics

Guidlines-Rules of Thumb

3. What are the 3 most common tools of financial statements

Horizontal Analysis
Vertical Analysis
Ratio Analysis

4. What is Horizontal Analysis?

Comparison of a company's financial statement, financial condition and performance ACCROSS TIME

5. What is Vertical Analysis

Comparison of a company's financial statement, financial condition and performance TO A BASE AMOUNT

6. What is Ratio Analysis

Measurement of Key Relations between financial statements items

7. COMPARISON STATEMENTS: Dollar change Ratio

Dollar Change= Analysis period amount-Base period amount

8. COMPARISON STATEMENT: Percent Change Equation

[(Analysis period amt-Base period amn)/Base period amt] x 100

9. TREND ANALYSIS: Trend Percent=

(Analysis period amt/base period amnt) x 100

10. COMMON SIZE STATEMENTS: Common Size Percent=

(Analysis amt/base amount) x 100