The following questions related to financial analysis.
Provide an example of a decision that would be affected by information on an organization’s financial statement. In addition to the example you have identified, consider the use of financial statement information in the following scenarios:
If a firm’s ROE is low and management wants to improve it, explain how debt might help. Is this a good decision? Why/why not?
Give some examples that illustrate how seasonal factors and different growth rates might distort a comparative ratio analysis. What can be done to correct this?