(BQ) Part 2 book "Survey of accounting" has contents: Financial statement analysis; an introduction to managerial accounting; cost accumulation, tracing, and allocation; relevant information for special decisions; performance evaluation; planning for capital investments,.and other contents. | Page 322 12/5/08 5:08:13 AM user-s174 /Users/user-s174/Desktop/TempWork/DECEMBER/4-12-08/MHBR086:EDMONDS/MHBR086-09 9 CHAPTER Financial Statement Analysis LEARNING OBJECTIVES After you have mastered the material in this chapter you will be able to: 1 2 3 4 5 6 7 8 Describe factors associated with communicating useful information. Differentiate between horizontal and vertical analysis. Explain ratio analysis. Calculate ratios for assessing a company’s liquidity. Calculate ratios for assessing a company’s solvency. Calculate ratios for assessing company management’s effectiveness. Calculate ratios for assessing a company’s position in the stock market. Explain the limitations of financial statement analysis. CHAPTER OPENING Expressing financial statement information in the form of ratios enhances its usefulness. Ratios permit comparisons over time and among companies, highlighting similarities, differences, and trends. Proficiency with common financial statement analysis techniques benefits both internal and external users. Before beginning detailed explanations of numerous ratios and percentages, however, we consider factors relevant to communicating useful information. Page 323 12/5/08 5:08:14 AM user-s174 /Users/user-s174/Desktop/TempWork/DECEMBER/4-12-08/MHBR086:EDMONDS/MHBR086-09 Curious The Accountant On May 14, 2007, DaimlerChrysler (DC) and Cerberus announced that Cerberus, a private-equity firm, was buying 80 percent of the Chrysler Group from DaimlerChrysler. The sale closed on August 3, 2007. Some analysts claimed the “sale” actually involved DaimlerChrysler paying Cerberus to take Chrysler off its hands. After the sale DaimlerChrysler planned to rename itself Daimler AG and focus its efforts on its production of commercial trucks and its Mercedes brand of cars. Three other groups in addition to Cerberus also made offers to buy Chrysler, but .
