Week 3 Getting Information from Financial Statements

Getting information from financial statements

Recap: In this lecture we will be referring to the financial statements of Amalgamated Hat Rack previously presented on the Week 2 lecture pages.  Please keep a copy of the statements close-by for reference as you work through the materials!

Analyzing a firm by looking at its financial statements
The question we address today is what can you tell about a company from looking at its financial statements? The answer is “a lot,” but it takes a little practice and, sometimes, a little detective work!

Note – Much of the material in this lesson is not in your textbooks. But take it from us, this is the way you should approach financial analysis. Most books, like ours, would have you dive right in to ratio analysis (which we will cover next week). We advocate a more systematic approach. Take a general look at what is going on first, and then go on to the ratios. This will help you make sense of the ratios when you get there!