13
Chapter
13
Analyzing
Financial
Statements
PowerPoint Authors:
Susan Coomer Galbreath, Ph.D., CPA
Charles W Caldwell, D.B.A., CMA
Jon A. Booker, Ph.D., CPA, CIA
Cynthia J. Rooney, Ph.D., CPA
McGraw­Hill/Irwin
Copyright © 2014 by The McGraw­Hill Companies, Inc. All rights reserved.-1
Financial
Statement
Analysis
Financial
statement
analysis
is
based
on
comparisons.
Time
series
Comparison
with
analysis
similar
companies
Examines a single
company to identify
trends over time.
Provides insights
concerning a
company’s relative
performance.
13-2
Component
Percentages
Express
each
item
on
a
particular
statement
as
a
percentage
of
a
single
base
amount.
Net
sales
Total
assets
on
the
income
on
the
balance
statement
sheet
The
comparative
income
statements
of
Home
Depot
for
2012,
2011,
and
2010
appear
on
the
next
slide.
Prepare
component
percentage
income
statements
where
net
sales
equal
100%.
13-3