Please assist in providing information for a paper addressing the necessary steps involved with evaluating the use of financial accounting information in making informed and ethical business decisions using comparative analysis and financial ratios.
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The steps involved with evaluating the use of financial accounting information in making informed and ethical business decisions using comparative analysis and ratio analysis.
The first step in making ethical business decisions is to take the financial statements of the company for the current year and also for the previous year(s). The financial statements include Balance sheet, income statement, statement of changes in the shareholders' equity and cash flow statement. For example, if the shareholder wants to invest in additional shares of the company, the shareholder would see the profit earned by the company and also return on equity capital. For that the earnings after tax depicted in the income statement and the amount of shareholders' equity depicted in the balance sheet need to be taken. If the return on equity is as per expectations, he will proceed to invest in ...
The solution provides the necessary steps with evaluating the use of financial accounting.