Financial Statement Analysis

Module code: EC7095

Financial statements are produced by businesses so that a wide range of users - including banks, suppliers, customers, Government and employees - can make economic decisions about the financial performance and position of that business.

The analysis used is often referred to as 'ratio analysis' and is usually divided into four sections: profitability, liquidity (solvency), gearing (leverage), and shareholder interests. It is not only accountants who have to use this type of financial information; in recent years changes have been made to the way this information is presented to make it easier for non-specialists to perform meaningful analysis.

Topics covered

• Financial reporting system
• The components of, and relationships between, financial statements
• Evaluating the relevance of information contained in financial statements
• Financial ratios
• Ethics and professional standards for financial analysts