case study

1. Comparative (Horizontal) Analysis

 Evaluate consecutive financial statements.

 Time-series performance of the firm (e.g., quarterly, semiannual,

and annual).

2. Common Size (Vertical) Analysis

 Evaluate financial performance across firms (e.g., cross-sectional

comparison with comparable firms, competitors, and

industry averages).

3. Ratio Analysis

 Variables computed from mathematical (economic)

relationships between financial variables

 Evaluate performance and understand future prospect, yet

ratios only provide the basis for interpretation and analysis.

4. Cash Flow Analysis

 Valuation of the firm (FCF) – determine intrinsic (true) value of

the firm.

5. Leverage Ratios: long-term/debt financing decision and risk of

financial distress.

6. Liquidity Ratios: corporate liquidity, financial distress, and

financing-investment interactions.

7. Efficiency Ratios: operating efficiency, operation decision,

expansion, shut-down, etc.

8. Profitability Ratios: a firm’s profitability and operating performance.

9. Market Valuation Measures: market valuation, risk, growth

opportunities, etc.

Again, please provide clear explanations to what the answers indicate.