Problem
Analyze Financial statement and explain in detail about questions:
A. Financial Statements are Communication Devices that convey some basic messages about the entities they portray. How can you use ratios to express a deeper understanding of the business.
B. What are the reasons for conducting financial statement analysis? Who participates in analyzing a firms' financial statements?
C. If you are asked to provide shareholders with an assessment of the firms' solvency and leverage, which financial ratios would you use? Why?
D. The basic formula for return on equity is net income divided by shareholders' equity. How can the DuPont framework be used to drill down into the components that impact ROE?
E. What are the limitations of using ratios as a tool of financial analysis?