ACC 650 week 8 discussion 1 answer to professor -1
Topic 8 DQ 1
Mar 28-30, 2024
Consider your current company, or a company that you have previously worked for, and describe and critique how financial statement analysis could be used for that organization. If you do not have relevant work experience, use the GCU Library to locate an article on financial statement analysis and compare the processes recommended by the article to those in the textbook. Your initial post should be approximately 250 words. To participate in follow up discussion, ask questions and post comments regarding classmates’ posts, or respond to follow-up questions posted by the instructor.
Please include proper citations in your discussion post. Points will be deducted if proper citations are not used.
Beena Response
Hello, Sir and Class
Article: Shah, N. K. (2020). Financial Statement Analysis Through Ratio Analysis of Selected Pharmaceutical Companies. GAP Interdisciplinarities, 3(6), 321-331.
The article analyzes how financial statement analysis can be used to evaluate performance by using it to assess the performance of selected companies in the pharmaceutical industry. According to the article, an analysis of financial statements should focus on both the income statement and the statement of financial position if meaningful information is to be gained that can aid in decision-making (Shah, 2020). To gauge changes in overall profitability and the efficiency of the use of internal resources, a ratio analysis of key figures in the income statement and statement of financial position is carried out. Key profitability ratios analyzed included gross and net margin, return on capital employed, and earnings per share. This is similar to how the textbook analyzes financial statements using ratios. The study also analyzes figures covering more than one year of the company’s operations; this provides a trend analysis that makes it easier to analyze how performance has changed over time. The analysis of financial statements, as carried out in the study, also provides meaningful information that can be used to evaluate the growth and stability of the company over time. One of the critical goals of financial statement analysis is to get information that can be used to assess a company’s stability and growth prospects (Shah, 2020). The study achieves this by analyzing the movement in assets and profitability over time, which can be used to evaluate the company’s likely future performance. The analysis of financial statements carried out in the study generally provides an accurate method of assessing specific aspects of performance. Aspects of operations, such as the use of assets that would not have been evaluated, are included in the analysis, which provides meaningful information that can be used for decision-making. The study generally shows that financial statement analysis is a reliable method of evaluating performance.
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