Question #18
Reading: Reading 13 Integration of Financial Statement Analysis Techniques
PDF File: Reading 13 Integration of Financial Statement Analysis Techniques.pdf
Page: 8
Status: Unattempted
Correct Answer: A
Question
An analyst is analyzing TRK Construction (TRK) for possible recommendation to his firm's clients. He wants to use TRK's financial statements to answer such questions as "Is TRK suitable for firm clients?", "Is TRK priced properly relative to peers?", "What is TRK's earnings quality?" The analyst is most likely to begin with:
Answer Choices:
A. a review of his firm’s framework for analysis of financial statements
B. analysts adjustments to the financial statements
C. a DuPont analysis
Explanation
Analysis of financial statements should be performed in the context of an overall
framework for the analysis of financial statements. Specific adjustments or analysis of
specific ratios is a secondary concern.