| Analyzing Financial Statements is intended to be a practical introduction to financial analysis from the viewpoint of the commercial loan officer. One of the keyskills of an effective loan officer is the ability to analyze acompany s fina/lcial statements so as to achieve an understanding of thecompany s past performance and then to use that analysis to makesound predictions about the company s future performance and credit-worthiness. Chapters ! and 2 serve as introductory chapters defining financialanalysis and explaining its purposes and limitations. Chapter 1 providesan overview of the orderly sequence of steps involved in financialanalysis. Chapter 2 emphasizes the importance of thoroughly under-standing a company and its operating environment and describes thevarious cyclical patterns of businesses which provide a conceptualframework for financial analvsis. |
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