How can reported data be used: analysis, ratios, and limitations.

Coull, Michelle; Douglas, Shonagh

Abstract

This unit considers how and why users of financial statements might seek to analyse them to gain insights into the performance and financial structure of different businesses. Many interested parties rely on published financial information to make decisions, for example, on whether to invest, to lend or to trade. They may even use ratios to predict company failure. The process of analysis starts with understanding the company operationally and reviewing the financial information available. Ratio analysis builds on this by showing the relationship between linked figures within the financial statements and by providing a basis for relevant comparisons. This unit will explain the process of analysis with a particular focus on applying it to published financial statements.

Citation

COULL, M. and DOUGLAS, S. 2024. How can reported data be used: analysis, ratios, and limitations. In Smith, S., Murphy, R. and Rose, J. (eds.) Principles of accounting. Accounting Streams [online], Unit 16. Available from: https://accounting-streams.org/principles-of-accounting/16.html

• Online Publication Date: Sep 30, 2024
• Publication Date: Sep 30, 2024
• Deposit Date: Mar 28, 2025
• Publicly Available Date: Apr 22, 2025
• Publisher: Accounting Streams
• Peer Reviewed: Peer Reviewed
• Book Title: Principles of accounting
• Chapter Number: Unit 16
• Keywords: Financial data; Analysis; Evaluate; Financial statements
• Public URL: https://rgu-repository.worktribe.com/output/2762139
• Publisher URL: https://accounting-streams.org/principles-of-accounting/16.html
• Additional Information: This output is a chapter from an online open access book. The book and other chapters are available at: https://accounting-streams.org/principles-of-accounting/0-3-contents.html
• Contract Date: Mar 9, 2025