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Explanation on financing
Actuarial calculation
Calculation of tax
2.2 Theory of Financial Statement Analysis
2.2.1 Basic concept of Financial Statement Analysis
John. J. Wild defined financial statement analysis as the
application of analytical tools
and
techniques
to
general-purpose
financial
statements
and
related data
to
derive
estimates
and
inferences useful
in
business
analysis.
Furthermore,
financial
statement
analysis
reduces
reliance
on
hunches,
guesses, and
intuition
for
business
decisions.
It
decreases the uncertainty in the business analysis.
One of the most important jobs for management or investor at the end of a financial
period is to analyze the company financial statement.
Financial
statement
analysis
separates
the
financial
statement
into
pieces of
smaller
information
units
and
finds
the
relationship between them.
Any
significant
relationship or any relationship between the
information will provide new information’s needed in making an important decision
accurately.
Information
that
gathers
from
those
relationships
will
add
another
vision
from different
perspective
and
will
give
more
depth
rather
the conventional
financial
report. The purpose of financial statement analysis is to convert raw data originated from
the report and translate to information that is more useful.
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