Evaluating The Performance Of A Company

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Reviewing and evaluating the performance of a company can be very challenging and may require some type of collection and review of financial information and statements. Financial statement analysis is a method of reviewing and analyzing a company’s or organizations financial statements such as their balance sheets, income statements, and statement of cash flows. Financial statement analysis helps companies gain an understanding of the financial position of the company, results of their operation, and cash flow of their company, which is also the main purpose of financial statements. In this paper, I will discuss the three methods of analysis: horizontal, vertical, and ratio, I will explain how financial information is utilized on making a certain decision, and provide an incident where a given method of analysis is utilized in a health care situation. The first method of analysis I will discuss is the horizontal analysis method. Horizontal analysis is a financial statement analysis method that displays a comparison study of income statements or a company’s balance sheet over a period of time (which is at least for two accounting periods). Horizontal analysis deals mainly and focuses on a company or organization’s trends and changes in their financial statements elements, over a period of time. Horizontal analysis also serves the purpose to see whether or not management is achieving their company’s objectives, for companies to evaluate their overall performance,

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