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Chapter 9 - Financial Statement Analysis - Accounting Primer
The following is an excerpt from The Executive's Guide to Business Valuation by valuation expert and M&A i-banker Justin Kuczmarski, MBA, CPA, CVA, CIRA, ABV. To view this free, 300-page guidebook, please click the blue link above to download.
Chapter 9 - Financial Statement Analysis - Primer in Accounting
Accounting, though not exactly the most interesting topic for 99.9% of society (the .1% comprising entirely of accountants) is an integral part of business. Whether you are an advisor or company officer, you will encounter key financial and accounting concepts. Without a basic grasp of financial statements, an attorney or business owner may not be able to ascertain the true financial performance of a business.
The following chapter is geared for professionals with little to no experience in accounting fundamentals. Professionals with sufficient experience in financial statements may find this chapter superflous. Nonetheless, Chapter 9 presents a concise overview of the basic principles of financial accounting. This chapter helps readers interpret the financial condition of the subject company over time and against peers. A financial statement analysis between teh subject company (Uncle Joe's in this executive guide) and the competition is important through shedding light on how valuation pricing multiples are constructed and defended.