If you were to get a physical from your doctor and he or she only took your blood pressure prior to stating that you are in good health, would you be concerned? If you have noticed in your readings, starting in Chapter 3, there has been explanation of the methods by which you could determine the financial health of a company. Name one and explain how it is computed. Which financial statement(s) does the input come from? Most importantly, what does it tell you about the financial performance or health?
Now for analysis we have three means of so doing: 1.) Horizontal analysis. 2.) Vertical analysis.3.) Ratios.
I need EACH OF YOU to define each of these, what it is, how it is done, and then GIVE AN EXAMPLE!!!
Additionally also address the query in the main topic of where the input comes for the calculation and what does your result MEAN, so you get a Debt/Equity ratio of 45%, so what?
What does this mean, good OR bad, to the company