Summary
Analysis work scheme
It is convenient to adjust to a working scheme to avoid a sense of confusion between so much figure and ratio
A possible work scheme can be as follows:
1.-Data collection in the company’s reports and reports, in the press and specialized magazines, internet…
2.- Inspection of the financial statements, having the first impression as a guide to the analysis
3.- Elaboration of data, (ratios, indexes), without converting this phase at the end of the study.
- Profit and Loss Account
- In absolute value and in the meantime on sales
- Comparison with past exercises and other companies
- Analyzing trends
- Balance sheet
- In absolute value and in the meantime on the asset
- Comparison with past exercises and other companies
- Selection and key figure chart
4.- Interpretation of data, asking questions and giving them answers, such as:
- Why are the variations in sales and margins?
- Are dividend payments reasonable?
Based on these questions we are building a global and own image about the company and / or project.
5.- Consideration of partial and provisional hypotheses and subsequent verification of them, which will explain the situation of the company.
6.- Diagnosis, i.e. moving from numbers to problems:
- Main problem
- Secondary problems and relationship with the primary
- Problems induced by the above
- Evolution of the F.E.P.