ABSTRACT
In this chapter, students learn how to analyze a firm’s financial statements in order to determine the firm’s strengths and weaknesses. Many of these methods are used by Wall Street analysts to help determine the true (intrinsic) value of a stock. The chapter also introduces a commonly used method for forecasting the firm’s financial statements into the future. The ability to analyze and forecast a firm’s financial statements is a skill that is valued by both firms and investment banks. Whether you wish to work for a big manufacturing firm or a brokerage firm, the skills taught in this chapter are invaluable.
