Ch 1

Question 1

In what consists FSA?

Answer 1

in using financial reports prepared by companies,
combined with other information, to evaluate the
past, current, and potential performance and
financial position of a company for the purpose of
making investment, credit, and other economic
decisions

Question 2

What is profit?

Answer 2

Revenues – Expenses
(R-E=P)

Question 3

What are the primary sources of information that
allow analysts to formulate such projections? (6)

Answer 3

• Balance Sheet
• Comprehensive Income Statement
• Statement of Shareholder’s Equity
• CashFlow Statements
• Notes to Financial statements
• Other data sources, such as MD&A, Press
  releases, earnings calls and other content from
  the annual report (10K) or Quarterly (10Q).

Question 4

FS Analysis Framework (7)

Answer 4

• Articulate the purpose and context of the analysis.
• Collect input data.
• Process data.
• Analyze/interpret the processed data.
• Develop and communicate conclusions and recommendations (e.g., with an analysis report).
• Follow-up.
• The analyst develops a model and back tests it in
  order to make reliable forecasts