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Accounting At Your Fingertips, 2e by George Murray, CPA.

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13.1 Analysis Methods

Looking at Previous Periods

Other Comparisons

Ratio Analysis

Automating the Process

Limitations of Financial Analysis

You’ve completed the financial statements for your company; now it’s time to take a deeper look at what the numbers mean. In this subchapter, we provide an overview of financial analysis and show you how to use it.

SEE ALSO 2.3, “Analyzing Transactions”

Looking at Previous Periods

Comparing data to a prior period—often called trend analysis or comparative analysis—is one way to put your company’s financials into perspective. In comparative analysis, you’re looking at the financial statements of the current period and at least one prior period and evaluating any significant or unusual increases or decreases. ...

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