The process of financial reporting, financial statement analysis, and valuation is intended to help investors and analysts to deeply understand a firm’s profitability and risk and to use that information to forecast future profitability and risk and ultimately value the firm, enabling intelligent investment decisions. This process lies at the heart of the role of accounting, financial reporting, capital markets, investments, portfolio management, and corporate management in the world economy. When conducted with care and integrity, thorough and thoughtful financial statement analysis and valuation is a fascinating and potentially rewarding activity that can create tremendous value for society. However, as the recent financial crises in our capital markets.
