The following steps make up the steps in financial statement analysis. 1.Identify the strategies the firm pursues to gain and sustain a competitive advantage. 2.Analyze the current profitability and risk of the firm using information in the
Financial statements.
3.Value the firm.
4.Identify the economic characteristics and competitive dynamics of the industry in
Which a particular firm participates.
5.Assess the quality of the firm's financial statements and,if necessary,adjust them for
Such desirable characteristics as sustainability or comparability.
6.Prepare forecasted financial statements.
A) 4,1,5,2,6,3
B) 1,2,3,4,5,6
C) 4,6,2,5,1,3
D) 1,4,2,5,3,6

Question

Quizplus · Accepted Answer

The correct sequence for financial statement analysis is to first identify the industry's economic characteristics (4), then the firm's strategies (1), assess the quality of financial statements (5), analyze profitability and risk (2), prepare forecasts (6), and finally value the firm (3).

The Following Steps Make Up the Steps in Financial Statement