ACC Reflection Summary: Financial Statement Analysis – 291, Week 5

Summary

Financial statement analysis is a key part of accounting. A student gets a summary of topics covered in a course, and reflections on them.

Topics covered

Students discussed topics they found easy and hard. They covered ratio, vertical, and horizontal analyses of financial statements. They also discussed common and preferred stock.

Topics found easy

Students found ratio, vertical, and horizontal analyses of financial statements easy. They also found distinguishing common and preferred stock easy. They were ready to use these concepts in the real world.

Topics found hard

Students struggled with calculating liquidity, profitability, and solvency ratios. They also struggled with how to apply these ratios to financial statements.

Unethical behaviour in accounting

Unethical behaviour in accounting can take many forms. It can include misleading financial analysis, misuse of funds, and manipulation of financial markets. The Sarbanes-Oxley Act was created to reduce this behaviour.

Key terms

Ratio analysis

A way of comparing different parts of a financial statement.

Vertical analysis

A way of comparing each item in a financial statement to a base figure.

Horizontal analysis

A way of comparing financial statements from different time periods.

Common stock

A type of stock that represents ownership in a corporation.

Preferred stock

A type of stock that has priority over common stock in receiving dividends.

Sarbanes-Oxley Act

A law that imposes strict auditing rules on accounting.

Questions this document helps with

• What are the different types of financial statement analysis?
• How do common and preferred stock differ?
• What does the Sarbanes-Oxley Act do?

Summary written with AI from the document's text.