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SFM Chapter 2

Chapter Two focuses on assessing a firm's financial health through an overview of key financial statements, including the balance sheet, income statement, and cash flow statement. It covers the interpretation of financial ratios, performance ratios, liquidity ratios, and valuation ratios, emphasizing their importance in decision-making. Students will learn the role of financial analysis, sources and approaches to it, and the limitations of ratio analysis.

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15 views2 pages

SFM Chapter 2

Chapter Two focuses on assessing a firm's financial health through an overview of key financial statements, including the balance sheet, income statement, and cash flow statement. It covers the interpretation of financial ratios, performance ratios, liquidity ratios, and valuation ratios, emphasizing their importance in decision-making. Students will learn the role of financial analysis, sources and approaches to it, and the limitations of ratio analysis.

Uploaded by

abush162223
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

Chapter Two

Assessing the Financial Health of A firm

 Overview of the basic financial statement


 The balance Sheet
 The Income Statement
 The Statement of shareholders equity
 The Statement of Cash flow
 Interpretation and Analysis of financial ratios
 Performance Ratios/profitability, activity and
return on capital rations
 Liquidity ratios/working capital analysis
 Analysis of capital Structure
 Valuation ratios and analysis for the investor
Learning Outcome

 At the end of this chapter, students will


be able to:
 Understand the role of financial
analysis in decision making
 Highlight the sources and approaches
to financial analysis
 Identify the main ratio analyses and
their role in decision making
 Pinpoint the major limitations of ratio
analysis

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