With at least 450 words, citing sources, please discuss the corporate finance to

Question

With at least 450 words, citing sources, please discuss the corporate finance topic below :
There are three different categories of people who read financial statements. Choose one category and provide examples of the types of information the person would be interested in. Explain why each type of information may be important to the person.

This is my required book for this class : ( however, you may use others for citation). Thank you!
Berk, J., DeMarzo, P. (07/2016). Corporate Finance, 4th Edition
With at least 450 words, citing sources, please discuss the corporate finance topic below :
There are three different categories of people who read financial statements. Choose one category and provide examples of the types of information the person would be interested in. Explain why each type of information may be important to the person.

This is my required book for this class : ( however, you may use others for citation). Thank you!
Berk, J., DeMarzo, P. (07/2016). Corporate Finance, 4th Edition

There are three different categories of people who read financial statements. Choose one category and provide examples of the types of information the person would be interested in. Explain why each type of information may be important to the person.

This is my required book for this class : ( however, you may use others for citation). Thank you!
Berk, J., DeMarzo, P. (07/2016). Corporate Finance, 4th Edition

Explanation / Answer

Financial statements including the profit & loss statement, balance sheet statements and the cash flow mentions the various facets of a company’s operational and financial data. While the profit & loss accounts typically mentions the revenues, cost of goods sold, depreciation incurred and the various expenses incurred to run the business and the net profit earned, the balance sheet provides a perspective on the assets and liabilities of the company.

These information are keenly observed by the equity research analyst who usually reads all the three statements and the notes to the account very carefully.

The reason that an equity research analyst reads and analyses the financial statements very carefully is because he wants to understand the health of the business and emerging trend in terms of increase/decrease in revenues, cost of goods sold, indebtedness, assets and capital expenditures to understand the efficiency of operations and the prospect the company hold from long term investment viewpoint.

The most important types of information the equity research analyst tries to find out from the financial statements are:

Source:

Berk, J., DeMarzo, P. (07/2016). Corporate Finance, 4th Edition

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