There are 4 inter-connected Financial Statements join
together show the Economic and Business reality of a business. They are Balance
sheet, Income Statement, Changes in Equity and Cash Flow statements.
This introductory part of financial statements is making me
think that to analyse financial statements, ratios are better option as it
focus on the relationships between different items of a firm’s financial
reports. As financial reports are audited it can be trusted. Whereas PV is not
a reliable option as it is present value of future cash flows and future is
uncertain.
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