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Reading 29: Financial Statement Analysis: An Introduction -

Q1. In the financial statement analysis framework, using the data to address the objectives of the analysis and deciding what conclusions or recommendations the information supports is best described as:

A)   processing the data.

B)   analyzing and interpreting the data.

C)   reporting the conclusions.

Q2. The step in the financial statement analysis framework of “processing the data” is least likely to include which activity?

A)   Acquiring the company’s financial statements.

B)   Making appropriate adjustments to the financial statements.

C)   Preparing exhibits such as graphs.

Q3. The step in the financial statement analysis framework that includes making any appropriate adjustments to the financial statements and calculating ratios is best described as:

A)   analyzing and interpreting the data.

B)   processing the data.

C)   gathering the data.

Q4. Which of the following is the best description of the financial statement analysis framework?

A)   State the objective and context, gather data, process the data, analyze and interpret the data, report the conclusions or recommendations, update the analysis.

B)   Gather data, analyze and interpret the data, process the conclusions, assess the context, report the recommendations, update the analysis.

C)   Gather data, analyze and interpret the data, determine the context, report the conclusions, update the analysis.

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