bases for comparison and limitations of financial statement analysis
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Please explain the bases for comparison and limitations of financial statement analysis in at least one paragraph please.
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The solution explains the bases for comparison and limitations of financial statement analysis.
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Analyzing Financial Statements involves evaluating three characteristics of a company: its liquidity, its profitability, and its solvency.
Comparisons can be made on many basis, but the main three categories are:
1) Intracompany basis: This is where we compare an item or financial relationship within a company in the current year with the same item or relationship in one or more prior years.
2) Industry Averages: This basis compares an item or a financial relationship of a company with industry averages (or norms) published by ...
Education
- BA, Ain Shams University, Cairo Egypt
- MBA, California State University, Sacramento
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