Interpretation Question Approach

Question 1

Components of response?

Answer 1

Introduction
Analysis
Conclusion

Question 2

What should be included in an introduction?

Answer 2

A brief two sentences on the ratios

Question 3

What should be included in a conclusion?

Answer 3

Address concern and make suggestions based on information
Limtatios of analysis

Question 4

How to split an analysis?

Answer 4

By profitability, liqudity and solvency

Financial position and performance

Question 5

Key points in an analysis?

Answer 5

Reasons/causes of ratio movements

Movements in position and performance that don’t match prior year results

Linkage between reported figures

Key drivers and impact of strategic decisions

One-off changes

Effect of assets