Week Two focuses on interpreting financial statements and the role of financial analysis in making informed financial decisions. In particular, we will explore how financial managers can use financial statements and analysis to evaluate a company’s financial health and performance, and to make strategic financial decisions.
Chapter 4 covers the different types of financial statements, including the balance sheet, income statement, and statement of cash flows. The chapter also covers EBITDA, reconciling balance sheets and income statements, free cash flow, and the limitations of financial statements and analysis.
In the discussion forum for Week Two, we will discuss how financial managers can use financial statements and analysis to make informed financial decisions. We will explore the different types of financial statements and how to interpret the information on them. We will also discuss the importance of EBITDA and free cash flow in financial analysis and the limitations of financial statements and analysis.
Discussion Prompt: How can financial managers use financial statements and analysis to evaluate a company’s financial health and performance?
Here are some questions to help you think about and research your discussion posts:
- What are the key sections of a balance sheet, income statement, and statement of cash flows, and what information do they provide?
- What is EBITDA, and how can it be used to compare the profitability of different companies?
- What is free cash flow, and how can it be used to evaluate a company’s financial health and growth potential?
- What are some limitations of financial statements and analysis, and how can financial managers account for these limitations when making financial decisions?
- How do financial managers use financial analysis to make informed decisions about investing in a company or making strategic financial decisions?
- What are the ethical considerations involved in financial analysis and decision-making, and how can financial managers ensure that they act in the best interests of their stakeholders?