Ratios and Financial Statement Analysis Research Paper by Nicky

Ratios and Financial Statement Analysis
A pro and con paper about the use of financial ratios and financial statement analysis.
# 128528 | 1,886 words | 10 sources | APA | 2010 | US
Published on Jul 26, 2010 in Business (Accounting) , Business (Finance, Investment and Banking)

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This paper describes the benefits and shortcomings of using financial ratios and financial statement analysis to evaluate a company's performance and financial position, while thoroughly investigating the factors that impact the meaningfulness of these measures. The factors taken under consideration are both internal and external to the company's direct environments and evaluate the consequences of such factors from different perspectives. Additionally, the paper explores the business practices and techniques developed as a consequence of applying financial ratios and financial statement analysis using information from the business environment over the last thirty years.
The paper serves as an informative summary for any individual that is not a financial or accounting specialist and desires to become familiar with such techniques and potentially use the information later on for investment purposes.

Executive Summary
Benefits and Limitations of Ratio Analysis
New Business Practices and Techniques-Ratio and Financial Analysis

From the Paper:

"Several business practices and techniques have been developed since the increased popularity of these methods in the last thirty years. On one hand, companies/managers desired to show only positive aspects about their companies and developed methods to hide imperfections, such as creative accounting and on the other hand, investors and financial analysts would prefer a clear picture of the business reality and consequently worked to develop ways of reducing the myopia created by the companies/managers' creativity."

Sample of Sources Used:

  • Amat, O., Blake, J. and Dowds, J. 1999. The Ethics of Creating Accounting. Economics Working Papers: Working Paper No. 455, from Department of Economics and Business, Universitat Pompeu Fabra.
  • Groppelli, A. A. , Nikbakht, E. 2000. Finance. 4th Edition, Barron's Business Review Series.
  • Investopedia (a), accessed Nov 2008, Liquidity Ratios, A Forbes Digital Company http://www.investopedia.com/terms/l/liquidityratios.asp
  • Investopedia (b), accessed Nov 2008, Solvency Ratio, A Forbes Digital Company http://www.investopedia.com/terms/s/solvencyratio.asp
  • Investopedia (c), accessed Nov 2008, Profitability Ratios, A Forbes Digital Company http://www.investopedia.com/terms/p/profitabilityratios.asp

Cite this Research Paper:

APA Format

Ratios and Financial Statement Analysis (2010, July 26) Retrieved March 04, 2021, from https://www.academon.com/research-paper/ratios-and-financial-statement-analysis-128528/

MLA Format

"Ratios and Financial Statement Analysis" 26 July 2010. Web. 04 March. 2021. <https://www.academon.com/research-paper/ratios-and-financial-statement-analysis-128528/>