About 'shareholder equity definition'|BREAKING. TopTV ending, becoming StarSat - hopefully in November - with new StarTV channels and its first high definition TV offering.
Ｍｅｍｏｒａｎｄｕｍ ＴＯ: ＥＥＣ Ｂｏａｒｄ ｏｆ Ｄｉｒｅｃｔｏｒｓ ＦＲＯＭ: Ｌｅｌａ Ｋｅｅｌ, ＥＥＣ Ｆｉｎａｎｃｉａｌ Ａｎａｌｙｓｔ ＤＡＴＥ: Ｊａｎｕａｒｙ 03, 2011 ＳＵＢＪＥＣＴ: Ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔ ｕｓａｇｅ Ｉｎｔｒｏｄｕｃｔｉｏｎ Ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔｓ ａｒｅ ｒｅｃｏｒｄｓ ｔｈａｔ ｏｆｆｅｒ ａｎ ｉｎｄｉｃａｔｉｏｎ ｏｆ ａ ｃｏｍｐａｎｙ'ｓ ｍｏｎｅｔａｒｙ ｃｏｎｄｉｔｉｏｎ ｄｕｒｉｎｇ ａ ｓｐｅｃｉｆｉｃ ｐｅｒｉｏｄ. Ｔｈｅｒｅ ａｒｅ ｆｏｕｒ ｂａｓｉｃ ｔｙｐｅｓ ｏｆ ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔｓ ｔｈａｔ Ｅｄｄｉｓｏｎ Ｅｌｅｃｔｒｏｎｉｃｓ Ｃｏｍｐａｎｙ (ＥＥＣ) ｗｉｌｌ ｎｅｅｄ ｔｏ ｕｓｅ ｔｏ ｄｅｔｅｒｍｉｎｅ ｔｈｅ ｆｉｎａｎｃｉａｌ ｓｔａｔｕｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ. Ｔｈｅｓｅ ｆｏｕｒ ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔｓ ａｒｅ ｔｈｅ ｂａｌａｎｃｅ ｓｈｅｅｔ, ｉｎｃｏｍｅ ｓｔａｔｅｍｅｎｔ, ｓｔａｔｅｍｅｎｔ ｏｆ ｃａｓｈ ｆｌｏｗｓ, ａｎｄ ｓｔａｔｅｍｅｎｔ ｏｆ ｓｔｏｃｋｈｏｌｄｅｒｓ' ｅｑｕｉｔｙ. Ｔｈｅ ｄａｔａ ｏｂｔａｉｎｅｄ ｉｎ ｔｈｅｓｅ ｓｔａｔｅｍｅｎｔｓ ｗｉｌｌ ｂｅ ｕｓｅｄ ｂｏｔｈ ｉｎｔｅｒｎａｌｌｙ ａｎｄ ｅｘｔｅｒｎａｌｌｙ ｔｏ ｍａｋｅ ｆｕｔｕｒｅ ｍｏｎｅｔａｒｙ ｄｅｃｉｓｉｏｎｓ ｆｏｒ ｔｈｅ ｃｏｍｐａｎｙ, ａｎｄ ｔｈｅｒｅｆｏｒｅ ｈａｖｉｎｇ ｋｎｏｗｌｅｄｇｅ ｏｆ ｔｈｅｓｅ ｓｔａｔｅｍｅｎｔｓ ｗｉｌｌ ｂｅ ｖｅｒｙ ｓｉｇｎｉｆｉｃａｎｔ ｆｏｒ ｔｈｅ ｆｉｎａｎｃｉａｌ ｓｕｃｃｅｓｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ (Ｂｅｓｔ, ｎ.ｄ.). Ｔｈｉｓ ｍｅｍｏ ｗｉｌｌ ａｄｄｒｅｓｓ ｔｈｅ ｐｒｅｖｉｏｕｓｌｙ ｍｅｎｔｉｏｎｅｄ ｓｔａｔｅｍｅｎｔｓ ｉｎ ｆｕｒｔｈｅｒ ｄｅｔａｉｌ ｓｏ ｔｈａｔ ｙｏｕ ｃａｎ ｇｅｔ ａ ｂｅｔｔｅｒ ｉｄｅａ ｏｆ ｈｏｗ ｅａｃｈ ｉｓ ｕｓｅｄ ｆｏｒ ｐｌａｎｎｉｎｇ ａｎｄ ｃｏｎｔｒｏｌｌｉｎｇ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ. Ｂａｌａｎｃｅ Ｓｈｅｅｔ Ｔｈｅ ｂａｌａｎｃｅ ｓｈｅｅｔ ｓｔａｔｅｍｅｎｔ ｗｉｌｌ ｅｎａｂｌｅ ｍｅ ｔｏ ｇｅｔ ａ "ｓｎａｐｓｈｏｔ" ｏｆ ｔｈｅ ｆｉｎａｎｃｉａｌ ｃｏｎｄｉｔｉｏｎ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ. Ｔｈｉｓ ｓｔａｔｅｍｅｎｔ ｗｉｌｌ ｌｉｓｔ ｉｎ ｄｅｔａｉｌ ａｌｌ ｏｆ ｔｈｅ ｔａｎｇｉｂｌｅ ａｎｄ ｉｎｔａｎｇｉｂｌｅ ｇｏｏｄｓ ｔｈａｔ ｔｈｅ ｃｏｍｐａｎｙ ｐｏｓｓｅｓｓｅｓ ａｎｄ ｗｈａｔ ｉｔ ｏｗｅｓ ａｔ ａ ｐａｒｔｉｃｕｌａｒ ｐｅｒｉｏｄ ｗｈｉｃｈ ｗｏｕｌｄ ｇｅｎｅｒａｌｌｙ ｂｅ ａｔ ｔｈｅ ｃｌｏｓｉｎｇ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ'ｓ ａｃｃｏｕｎｔｉｎｇ ｐｅｒｉｏｄ. Ｔｈｅ ｍａｊｏｒ ｃｏｍｐｏｎｅｎｔｓ ｉｎｃｌｕｄｅｄ ｉｎ ｔｈｅ ｂａｌａｎｃｅ ｓｈｅｅｔ ｓｔａｔｅｍｅｎｔ ｗｉｌｌ ｂｅ ｔｈｅ ａｓｓｅｔｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ, ｗｈｉｃｈ ｗｉｌｌ ｉｎｃｌｕｄｅ ａｎｙｔｈｉｎｇ ｔｈａｔ ｉｓ ａｃｔｕａｌｌｙ ｏｗｎｅｄ ｂｙ ｔｈｅ ｃｏｍｐａｎｙ; ｔｈｅ ｌｉａｂｉｌｉｔｉｅｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ, ｗｈｉｃｈ ｗｉｌｌ ｉｎｃｌｕｄｅ ｔｈｉｎｇｓ ｔｈａｔ ｔｈｅ ｃｏｍｐａｎｙ ｈａｓ ａｃｑｕｉｒｅｄ ｆｒｏｍ ｏｔｈｅｒ ｃｏｒｐｏｒａｔｅ ｅｎｔｉｔｉｅｓ ｏｒ ｉｎｄｉｖｉｄｕａｌｓ, ｓｕｃｈ ａｓ ｍｏｎｅｙ ｏｒ ｇｏｏｄｓ; ａｎｄ ｔｈｅ ｃｏｍｐａｎｙ'ｓ ｓｈａｒｅｈｏｌｄｅｒ ｅｑｕｉｔｙ, ｗｈｉｃｈ ｗｉｌｌ ｂｅ ｔｈｅ ｍｏｎｅｙ ｔｈａｔ ｗｏｕｌｄ ｂｅ ｌｅｆｔ ｏｖｅｒ ｉｆ ｔｈｅ ｃｏｍｐａｎｙ ｄｅｃｉｄｅｄ ｔｏ ｓｅｌｌ ａｌｌ ａｓｓｅｔｓ ａｎｄ ｐａｙ ｏｆｆ ｌｉａｂｉｌｉｔｉｅｓ, ａｎｄ ｔｈｉｓ ｍｏｎｅｙ ｗｏｕｌｄ ｇｏ ｔｈｅ ｓｈａｒｅｈｏｌｄｅｒｓ ａｎｄ/ｏｒ ｏｗｎｅｒｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ. (Ｕ.Ｓ. Ｓｅｃｕｒｉｔｉｅｓ ａｎｄ Ｅｘｃｈａｎｇｅ Ｃｏｍｍｉｓｓｉｏｎ, 2007). Ｆｏｒ ｉｎｓｔａｎｃｅ, ｉｆ ＥＥＣ ｈａｓ $25,000 ｉｎ ａｓｓｅｔｓ ａｎｄ $20,000 ｉｎ ｌｉａｂｉｌｉｔｉｅｓ ｔｈｅｎ ｔｈｅ ｅｑｕｉｔｙ ｗｏｕｌｄ ｂｅ $5,000 ｌｅｆｔｏｖｅｒ ｆｏｒ ｔｈｅ ｓｈａｒｅｈｏｌｄｅｒｓ ａｎｄ/ｏｒ ｏｗｎｅｒｓ. Ｔｈｅ ｉｎｖｅｎｔｏｒｙ ａｃｃｏｕｎｔｓ ｏｎ ａ ｂａｌａｎｃｅ ｓｈｅｅｔ ｆｏｒ ＥＥＣ ｗｏｕｌｄ ｃｏｎｓｉｓｔ ｏｆ ｔｈｅ ｍａｔｅｒｉａｌｓ ｔｈａｔ ｔｈｅ ｃｏｍｐａｎｙ ｐｏｓｓｅｓｓｅｓ ｔｏ ｃｏｍｐｌｅｔｅ ｔｈｅ ｐｒｏｄｕｃｔｓ ｗｅ ｍａｎｕｆａｃｔｕｒｅ, ｔｈｅ ｗｏｒｋ ｉｎ ｐｒｏｇｒｅｓｓ ｔｈａｔ ｔｈｅ ｃｏｍｐａｎｙ ｉｓ ｃｏｍｐｌｅｔｉｎｇ ａｎｄ ｇｏｏｄｓ ｔｈａｔ ａｒｅ ｆｉｎｉｓｈｅｄ ｂｙ ｔｈｅ ｃｏｍｐａｎｙ (Ｇａｒｒｉｓｏｎ, Ｎｏｒｅｅｎ, & Ｂｒｅｗｅｒ, 2010). Ｈｏｗｅｖｅｒ, ｔｈｅ ｄａｔａ ｉｎｃｏｒｐｏｒａｔｅｄ ｉｎ ｔｈｉｓ ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔ ｃａｎ ａｌｓｏ ｂｅ ｂｒｏｋｅｎ ｄｏｗｎ ｆｕｒｔｈｅｒ ｔｏ ｂｅｔｔｅｒ ｄｅｆｉｎｅ ｔｈｅ ｐｒｏｄｕｃｔｓ ｗｅ ｍａｎｕｆａｃｔｕｒｅ ｗｉｔｈｉｎ ｅａｃｈ ｓｐｅｃｉｆｉｃ ｄｉｖｉｓｉｏｎ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ. Ｍａｎａｇｅｒｓ ｂｅｎｅｆｉｔ ｂｙ ｄｏｉｎｇ ｔｈｉｓ ｂｅｃａｕｓｅ ｔｈｅｙ ａｒｅ ｇｉｖｅｎ ｂｅｔｔｅｒ ｏｂｓｅｒｖａｔｉｏｎ ｏｎ ｔｈｅ ｐｅｒｆｏｒｍａｎｃｅ ｏｆ ｔｈｅｉｒ ｓｐｅｃｉｆｉｃ ｏｐｅｒａｔｉｏｎａｌ ａｒｅａｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ. Ｉｎｃｏｍｅ Ｓｔａｔｅｍｅｎｔ Ｔｈｅ ｉｎｃｏｍｅ ｓｔａｔｅｍｅｎｔ ｗｉｌｌ ｐｒｏｖｉｄｅ ｍｅ ｗｉｔｈ ａ ｒｅｐｏｒｔ ｏｆ ｈｏｗ ｍｕｃｈ ｉｎｃｏｍｅ ｔｈｅ ｃｏｍｐａｎｙ ｒｅｃｅｉｖｅｄ ｏｖｅｒ ａ ｓｐｅｃｉｆｉｃ ｔｉｍｅ, ｗｈｉｃｈ ｗｉｌｌ ｔｙｐｉｃａｌｌｙ ｂｅ ｐｕｔ ｔｏｇｅｔｈｅｒ ｙｅａｒｌｙ. Ｔｈｅ ｅｘｐｅｎｓｅｓ ｒｅｌａｔｅｄ ｔｏ ｒｅｃｅｉｖｉｎｇ ｔｈｅ ｉｎｃｏｍｅ ｗｉｌｌ ａｌｓｏ ｂｅ ｓｈｏｗｎ ｏｎ ｔｈｉｓ ｓｔａｔｅｍｅｎｔ. Ｓｕｍｍｉｎｇ ｕｐ ｔｈｅ ｒｅｖｅｎｕｅ ａｎｄ ｅｘｐｅｎｓｅｓ ｏｖｅｒ ａ ｇｉｖｅｎ ｐｅｒｉｏｄ ｗｉｌｌ ｃｏｍｍｕｎｉｃａｔｅ ｔｈｅ ｃｏｍｐａｎｙ'ｓ ｎｅｔ ｅａｒｎｉｎｇｓ ａｎｄ/ｏｒ ｌｏｓｓｅｓ (Ｕ.Ｓ. Ｓｅｃｕｒｉｔｉｅｓ ａｎｄ Ｅｘｃｈａｎｇｅ Ｃｏｍｍｉｓｓｉｏｎ, 2007). Ｉｎｔｅｒｎａｌ ｉｎｃｏｍｅ ｓｔａｔｅｍｅｎｔｓ ｆｒｅｑｕｅｎｔｌｙ ｐｒｅｓｅｎｔ ｉｎｆｏｒｍａｔｉｏｎ ｏｎ ｐｅｒｆｏｒｍａｎｃｅ ｔｈａｔ ｉｓ ｒｅｌａｔｅｄ ｔｏ ｔｈｅ ｐｒｏｄｕｃｔｓ ｗｅ ｍａｎｕｆａｃｔｕｒｅ, ｔｈｅ ｐｒｏｄｕｃｔ ｌｉｎｅｓ ｗｅ ｐｒｏｄｕｃｅ, ａｎｄ ｔｈｅ ｐｒｏｃｅｓｓｅｓ ｏｆ ｐｒｏｄｕｃｉｎｇ ｔｈｅｓｅ ｐｒｏｄｕｃｔｓ (ＣＴＵ Ｏｎｌｉｎｅ, 2011). Ｗｉｔｈ ｔｈｅ ｆｏｒｍａｔｉｏｎ ｏｆ ｃｏｓｔ ｆｏｒ ｔｈｅ ｐｒｏｄｕｃｔｓ ｔｈｅ ｃｏｍｐａｎｙ ｍａｎｕｆａｃｔｕｒｅｓ ｂｅｉｎｇ ｖｉｔａｌ ｔｏ ｔｈｅ ｐｒｏｆｉｔｓ ｔａｋｅｎ ｉｎ ｈａｖｉｎｇ ｓｐｅｃｉｆｉｃ ｃｏｓｔ ｉｎｆｏｒｍａｔｉｏｎ ｉｓ ｖｅｒｙ ｉｍｐｏｒｔａｎｔ ｆｏｒ ｏｐｅｒａｔｉｏｎａｌ ａｃｔｉｖｉｔｙ ｐｌａｎｎｉｎｇ. Ａｌｓｏ, ｗｈｅｎ ｃｏｓｔｓ ａｒｅ ｒｅｏｒｇａｎｉｚｅｄ ａｎｄ ｓｈｉｆｔｅｄ ｂｙ ｔｈｅｉｒ ｂｅｈａｖｉｏｒ ｐａｔｔｅｒｎｓ ａ ｃｏｎｔｒｉｂｕｔｉｏｎ ｍａｒｇｉｎ ｉｎｃｏｍｅ ｓｔａｔｅｍｅｎｔ ｃａｎ ｂｅ ｇｅｎｅｒａｔｅｄ. Ｔｈｉｓ ｔｙｐｅ ｏｆ ｉｎｃｏｍｅ ｓｔａｔｅｍｅｎｔ ｗｉｌｌ ｒｅｐｒｅｓｅｎｔ ｔｈｅ ｒｅｍａｉｎｉｎｇ ｒｅｓｏｕｒｃｅｓ ｌｅｆｔ ｔｏ ｃｏｖｅｒ ｔｈｅ ｆｉｘｅｄ ｅｘｐｅｎｓｅｓ ａｆｔｅｒ ａｃｃｏｕｎｔｉｎｇ ｆｏｒ ｔｈｅ ｖａｒｉａｂｌｅ ｅｘｐｅｎｓｅｓ (Ｕ.Ｓ. Ｓｅｃｕｒｉｔｉｅｓ ａｎｄ Ｅｘｃｈａｎｇｅ Ｃｏｍｍｉｓｓｉｏｎ, 2007). Ｂｙ ｂｅｉｎｇ ｐｒｅｓｅｎｔｅｄ ｗｉｔｈ ｐｒｏｆｉｔａｂｉｌｉｔｙ ｉｎｆｏｒｍａｔｉｏｎ ｏｎ ｔｈｅ ｄｉｆｆｅｒｅｎｔ ｐｒｏｄｕｃｔｓ ｔｈｅ ｃｏｍｐａｎｙ ｈａｓ ｔｏ ｏｆｆｅｒ ｔｈｉｓ ｗｉｌｌ ｂｅｎｅｆｉｔ ｍａｎａｇｅｍｅｎｔ ｂｙ ａｌｌｏｗｉｎｇ ｔｈｅｍ ｔｈｅ ｏｐｐｏｒｔｕｎｉｔｙ ｔｏ ｒｅｃｌａｓｓｉｆｙ ａｎｄ ｒｅｏｒｇａｎｉｚｅ ｃｏｓｔｓ ａｓｓｏｃｉａｔｅｄ ｗｉｔｈ ｆｕｔｕｒｅ ｗｏｒｋ ｐｅｒｉｏｄｓ. Ｔｈｉｓ ｉｎ ｒｅｔｕｒｎ ｗｉｌｌ ｆａｃｉｌｉｔａｔｅ ｔｈｅ ｆｉｎａｎｃｉａｌ ｄｅｃｉｓｉｏｎ-ｍａｋｉｎｇ ｐｒｏｃｅｓｓ ｉｎ ｒｅｇａｒｄｓ ｔｏ ａｃｃｕｒａｔｅｌｙ ｄｅｆｉｎｉｎｇ ｐｒｏｄｕｃｔ ｐｒｉｃｅｓ, ｍａｋｉｎｇ ｐｒｉｃｅ ａｄｊｕｓｔｍｅｎｔ, ｄｅｖｅｌｏｐｉｎｇ ｎｅｗ ｐｒｏｄｕｃｔ ｌｉｎｅｓ, ａｎｄ ｅｌｉｍｉｎａｔｉｎｇ ｎｏｎ-ｐｒｏｆｉｔａｂｌｅ ｐｒｏｄｕｃｔｓ ｓｏ ｔｈａｔ ｒｅｓｏｕｒｃｅｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ ａｒｅ ｎｏｔ ｄｒａｉｎｅｄ. Ｓｔａｔｅｍｅｎｔ ｏｆ Ｃａｓｈ Ｆｌｏｗｓ Ｔｈｅ ｓｔａｔｅｍｅｎｔ ｏｆ ｃａｓｈ ｆｌｏｗｓ ｗｉｌｌ ｂｅ ａ ｒｅｐｏｒｔ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ'ｓ ｃａｓｈ ｉｎｆｌｏｗ ａｎｄ ｏｕｔｆｌｏｗ. Ｉｔ ｗｉｌｌ ｓｈｏｗ ｍｅ ａｌｔｅｒａｔｉｏｎｓ ｏｖｅｒ ｔｉｍｅ ａｎｄ ｎｏｔ ｊｕｓｔ ａ ｔｏｔａｌ ｃａｓｈ ａｍｏｕｎｔ ａｔ ａ ｓｐｅｃｉｆｉｃ ｔｉｍｅ. Ｔｈｉｓ ｉｓ ｖｅｒｙ ｉｍｐｏｒｔａｎｔ ｆｏｒ ｔｈｅ ｃｏｍｐａｎｙ ｓｉｎｃｅ ｗｅ ｗｉｌｌ ｗａｎｔ ｔｏ ｈａｖｅ ｓｕｆｆｉｃｉｅｎｔ ｍｏｎｅｙ ｒｅａｄｉｌｙ ａｖａｉｌａｂｌｅ ｔｏ ｐａｙ ｏｐｅｒａｔｉｎｇ ｃｏｓｔｓ ａｎｄ ｐａｙ ｆｏｒ ａｓｓｅｔｓ ａｓｓｏｃｉａｔｅｄ ｗｉｔｈ ｒｕｎｎｉｎｇ ｔｈｅ ｃｏｍｐａｎｙ. Ｔｈｉｓ ｓｔａｔｅｍｅｎｔ ｗｉｌｌ ｕｓｅ ａｎｄ ｒｅｏｒｄｅｒ ｔｈｅ ｄａｔａ ｏｎ ｔｈｅ ｂａｌａｎｃｅ ｓｈｅｅｔ ａｎｄ ｉｎｃｏｍｅ ｓｔａｔｅｍｅｎｔ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ. Ａｌｔｈｏｕｇｈ, ａｓ ｐｒｅｖｉｏｕｓｌｙ ｍｅｎｔｉｏｎｅｄ, ａｎ ｉｎｃｏｍｅ ｓｔａｔｅｍｅｎｔ ｃａｎ ｓｈｏｗ ｗｈｅｔｈｅｒ ｔｈｅ ｃｏｍｐａｎｙ ｐｒｏｆｉｔｅｄ ｏｖｅｒ ａ ｇｉｖｅｎ ｔｉｍｅ ｐｅｒｉｏｄ, ｔｈｅ ｓｔａｔｅｍｅｎｔ ｏｆ ｃａｓｈ ｆｌｏｗ ｃａｎ ｒｅｖｅａｌ ｗｈｅｔｈｅｒ ｔｈｅ ｃｏｍｐａｎｙ ｇｅｎｅｒａｔｅｄ ｍｏｎｅｙ ｆｏｒ ａ ｓｐｅｃｉｆｉｃ ｐｅｒｉｏｄ. Ａｌｌ ｉｎｃｏｍｉｎｇ ｃａｓｈ ｒｅｃｅｉｐｔｓ ａｎｄ ｏｕｔｇｏｉｎｇ ｃａｓｈ ｐａｙｍｅｎｔｓ ｆｏｒ ｔｈｅ ｃｏｍｐａｎｙ ｗｉｌｌ ｂｅ ｄｅｔａｉｌｅｄ ｏｎ ｔｈｅ ｃａｓｈ ｆｌｏｗ ｓｔａｔｅｍｅｎｔ. Ａｎｙ ｖａｒｉａｔｉｏｎｓ ｉｎ ｃａｓｈ ｉｎｆｌｏｗ ａｎｄ ｏｕｔｆｌｏｗ ｆｏｒ ｔｈｅ ｃｏｍｐａｎｙ ｄｕｒｉｎｇ ｔｈｅ ｐｅｒｉｏｄ ｏｆ ｔｈｅ ｒｅｐｏｒｔ ｗｉｌｌ ｂｅ ａｐｐａｒｅｎｔ ｉｎ ｔｈｅ ｃａｓｈ ｆｌｏｗ ｓｔａｔｅｍｅｎｔ. Ｔｈｅ ｃａｓｈ ｉｎｆｌｏｗｓ ａｎｄ ｏｕｔｆｌｏｗｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ ｗｉｌｌ ｂｅ ｃａｔｅｇｏｒｉｚｅｄ ｉｎｔｏ ｄｅｔａｉｌｅｄ ａｃｔｉｖｉｔｉｅｓ ｏｆ ｂｕｓｉｎｅｓｓ. Ｔｈｅｓｅ ａｃｔｉｖｉｔｉｅｓ ｏｆ ｂｕｓｉｎｅｓｓ ａｒｅ ｏｐｅｒａｔｉｎｇ, ｉｎｖｅｓｔｉｎｇ, ａｎｄ ｆｉｎａｎｃｉｎｇ. Ｏｐｅｒａｔｉｎｇ ａｃｔｉｖｉｔｉｅｓ ｗｉｌｌ ｐｒｏｄｕｃｅ ｒｅｔｕｒｎｓ, ｅｘｐｅｎｓｅｓ ａｓｓｏｃｉａｔｅｄ ｗｉｔｈ ｔｈｅｓｅ ｒｅｔｕｒｎｓ, ａｎｄ ｔｈｅ ｇａｉｎｓ ｏｒ ｌｏｓｓｅｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ ｉｎ ｗｈｉｃｈ ｔｈｅ ｎｅｔ ｉｎｃｏｍｅ ｐｒｅｓｅｎｔｅｄ ｏｎ ｔｈｅ ｉｎｃｏｍｅ ｓｔａｔｅｍｅｎｔ ｗｉｌｌ ｂｅ ｄｉｒｅｃｔｌｙ ｉｎｆｌｕｅｎｃｅｄ. Ｔｈｅ ｃｕｒｒｅｎｔ ａｓｓｅｔｓ ａｎｄ ｌｉａｂｉｌｉｔｉｅｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ ｗｉｌｌ ａｌｓｏ ｂｅ ｉｎｆｌｕｅｎｃｅｄ ｄｉｒｅｃｔｌｙ ｂｙ ｔｈｅ ｏｐｅｒａｔｉｎｇ ａｃｔｉｖｉｔｉｅｓ ａｎｄ ｔｈｉｓ ｗｉｌｌ ｉｍｐａｃｔ ｔｈｅ ｃｏｍｐａｎｙ'ｓ ｂａｌａｎｃｅ ｓｈｅｅｔ. Ｔｈｅ ｃｏｎｔｉｎｕｉｎｇ ａｓｓｅｔｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ ｗｉｌｌ ｉｎｃｒｅａｓｅ ａｎｄ ｄｅｃｒｅａｓｅ ｔｈｒｏｕｇｈ ｔｈｅ ｃｏｍｐａｎｙ'ｓ ａｃｔｉｖｉｔｉｅｓ ｏｆ ｉｎｖｅｓｔｍｅｎｔ, ａｎｄ ｔｈｅ ｓａｌｅｓ ａｎｄ ｐｕｒｃｈａｓｅｓ ｒｅｌａｔｅｄ ｔｏ ｔｈｅ ｃｏｎｔｉｎｕｉｎｇ ａｓｓｅｔｓ ｗｉｌｌ ｂｅ ｒｅｐｏｒｔｅｄ ｏｎ ｔｈｅ ｃａｓｈ ｆｌｏｗ ｓｔａｔｅｍｅｎｔ ａｓ ａｃｔｉｖｉｔｉｅｓ ｏｆ ｉｎｖｅｓｔｍｅｎｔ ｆｏｒ ｔｈｅ ｃｏｍｐａｎｙ, ｔｈｉｓ ｗｉｌｌ ａｌｓｏ ｉｎｃｌｕｄｅ ａｌｌ ｌｏａｎｓ ａｎｄ ｃｏｌｌｅｃｔｉｏｎ ｏｆ ｌｏａｎｓ ｒｅｌｅｖａｎｔ ｔｏ ｔｈｅ ｃｏｍｐａｎｙ. Ｔｈｅ ｃａｔｅｇｏｒｉｚａｔｉｏｎ ｏｆ ａｃｔｉｖａｔｅｓ ｒｅｌａｔｅｄ ｔｏ ｆｉｎａｎｃｉｎｇ ｆｏｒ ｔｈｅ ｃｏｍｐａｎｙ ｗｉｌｌ ｂｅ ａｎｙ ｍｏｎｅｙ ｔｈａｔ ｉｓ ｏｂｔａｉｎｅｄ ｆｏｒ ｆｕｎｄｉｎｇ ｏｒ ｌａｕｎｃｈｉｎｇ ｔｈｅ ｐｒｏｃｅｓｓｅｓ ｒｅｌａｔｅｄ ｔｏ ｆｕｎｃｔｉｏｎｉｎｇ ｔｈｅ ｂｕｓｉｎｅｓｓ. Ｓｔｏｃｋ ｉｓｓｕａｎｃｅ, ｂｏｒｒｏｗｅｄ ｍｏｎｅｙ ｆｒｏｍ ｂａｎｋｓ, ｓｅｌｌｉｎｇ ｏｒ ｐｕｒｃｈａｓｉｎｇ ｓｔｏｃｋ ｔｒｅａｓｕｒｅ, ａｎｄ ｐａｙｉｎｇ ｓｈａｒｅｓ ｔｏ ｓｈａｒｅｈｏｌｄｅｒｓ ｗｏｕｌｄ ｂｅ ｒｅｐｏｒｔｅｄ ｏｎ ｔｈｅ ｓｔａｔｅｍｅｎｔ ｏｆ ｃａｓｈ ｆｌｏｗ ｓｉｎｃｅ ａｌｌ ｏｆ ｔｈｅｓｅ ａｒｅ ｃｏｎｓｉｄｅｒｅｄ ｆｉｎａｎｃｉｎｇ ａｃｔｉｖｉｔｉｅｓ. Ｉｔ ｗｏｕｌｄ ｇｅｎｅｒａｌｌｙ ｂｅ ａ ｇｏｏｄ ｉｎｄｉｃａｔｉｏｎ ｆｏｒ ｔｈｅ ｃｏｎｔｉｎｕｉｎｇ ｓｕｃｃｅｓｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ ｉｆ ｗｈｅｎ ａｎａｌｙｚｉｎｇ ｔｈｅ ｓｔａｔｅｍｅｎｔ ｏｆ ｃａｓｈ ｆｌｏｗｓ ｔｈｅ ｍａｊｏｒｉｔｙ ｏｆ ｃａｓｈ ｆｌｏｗｉｎｇ ｒｅｌａｔｅｄ ｔｏ ｆｕｎｃｔｉｏｎｉｎｇ ｔｈｅ ｂｕｓｉｎｅｓｓ ｃａｍｅ ｆｒｏｍ ｏｐｅｒａｔｉｎｇ ａｃｔｉｖｉｔｉｅｓ. Ｈａｖｉｎｇ ｋｎｏｗｌｅｄｇｅ ｏｆ ｈｏｗ ｔｏ ａｃｃｕｒａｔｅｌｙ ｏｒｇａｎｉｚｅ ａｎｄ ｅｖａｌｕａｔｅ ｃａｓｈ ｉｎｆｌｏｗｓ ａｎｄ ｏｕｔｆｌｏｗｓ ｒｅｌａｔｅｄ ｔｏ ｔｈｅ ｏｐｅｒａｔｉｏｎｓ ｏｆ ｔｈｅ ｂｕｓｉｎｅｓｓ ｗｉｌｌ ａｉｄ ｍａｎａｇｅｒｓ ｉｎ ｎｏｔｉｃｉｎｇ ａｒｅａｓ ｏｆ ｐｒｏｂｌｅｍｓ ａｎｄ ｃｏｎｔｒｏｌｌｉｎｇ ｔｈｅ ｃｏｓｔ ａｓｓｏｃｉａｔｅｄ ｗｉｔｈ ｂｕｓｉｎｅｓｓ ｏｐｅｒａｔｉｏｎｓ ｗｉｌｌ ｍａｘｉｍｉｚｅ ｔｈｅ ｃｏｍｐａｎｙ'ｓ ｃａｐａｂｉｌｉｔｉｅｓ ｔｏ ｆｕｎｃｔｉｏｎ (Ｕ.Ｓ. Ｓｅｃｕｒｉｔｉｅｓ ａｎｄ Ｅｘｃｈａｎｇｅ Ｃｏｍｍｉｓｓｉｏｎ, 2007). Ｓｔａｔｅｍｅｎｔ ｏｆ Ｓｔｏｃｋｈｏｌｄｅｒｓ' Ｅｑｕｉｔｙ Ｔｈｅ ｓｔａｔｅｍｅｎｔ ｏｆ ｓｈａｒｅｈｏｌｄｅｒｓ' ｅｑｕｉｔｙ ｉｓ ｃａｓｈ ｏｒ ｏｔｈｅｒ ｔｙｐｅｓ ｏｆ ａｓｓｅｔｓ ｐｒｏｖｉｄｅｄ ｔｏ ｔｈｅ ｂｕｓｉｎｅｓｓ ｂｙ ｔｈｅ ｐｏｓｓｅｓｓｏｒ ｏｒ ｐｏｓｓｅｓｓｏｒｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ ｔｏ ｐｕｒｃｈａｓｅ ａｓｓｅｔｓ ｔｏ ｂｅｇｉｎ ｔｈｅ ｂｕｓｉｎｅｓｓ. Ａｎｙ ｒｅｍａｉｎｉｎｇ ｉｎｃｏｍｅ ｔｈａｔ ｉｓ ｎｏｔ ｒｅｍｕｎｅｒａｔｅｄ ｏｕｔ ｉｎ ｔｈｅ ｓｔｒｕｃｔｕｒｅ ｏｆ ｓｈａｒｅｓ ｔｏ ｔｈｅ ｐｏｓｓｅｓｓｏｒ ｏｒ ｐｏｓｓｅｓｓｏｒｓ ａｒｅ ａｌｓｏ ａｄｄｅｄ ｔｏ ｔｈｅ ｓｈａｒｅｈｏｌｄｅｒｓ' ｅｑｕｉｔｙ ａｎｄ ａｎｙ ｓｈｏｒｔｆａｌｌｓ ｔｈｒｏｕｇｈ ｔｈｅ ｕｎｄｅｒｔａｋｉｎｇ ｏｆ ｔｈｅ ｂｕｓｉｎｅｓｓ ｉｓ ｄｅｄｕｃｔｅｄ ｆｒｏｍ ｔｈｅ ｓｈａｒｅｈｏｌｄｅｒｓ' ｅｑｕｉｔｙ. Ａｌｌ ａｌｔｅｒａｔｉｏｎｓ ｔａｋｉｎｇ ｐｌａｃｅ ｗｉｔｈｉｎ ａ ｐａｒｔｉｃｕｌａｒ ｒｅｐｏｒｔｉｎｇ ｐｈａｓｅ ａｒｅ ｒｅｖｅａｌｅｄ ｏｎ ｔｈｅ ｓｔａｔｅｍｅｎｔ ｏｆ ｓｈａｒｅｈｏｌｄｅｒｓ' ｅｑｕｉｔｙ. Ｅｑｕｉｔｙ ｗｉｌｌ ｉｎｃｒｅａｓｅ ｆｏｒ ｔｈｅ ｃｏｍｐａｎｙ ｆｒｏｍ ｉｎｖｅｓｔｍｅｎｔ ａｎｄ ｉｎｃｏｍｅ ａｎｄ ｓｈｏｒｔｆａｌｌｓ ｏｒ ｅｘｔｒａｃｔｉｏｎｓ ｗｉｌｌ ｄｅｃｒｅａｓｅ ｔｈｅ ｅｑｕｉｔｙ ｆｏｒ ｔｈｅ ｃｏｍｐａｎｙ, ｂｕｔ ａｌｌ ｏｆ ｔｈｉｓ ｗｉｌｌ ｂｅ ｃｏｍｍｕｎｉｃａｔｅｄ ｏｎ ｔｈｉｓ ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔ (Ｕ.Ｓ. Ｓｅｃｕｒｉｔｉｅｓ ａｎｄ Ｅｘｃｈａｎｇｅ Ｃｏｍｍｉｓｓｉｏｎ, 2007). Ｆｉｎａｎｃｉａｌ Ｓｔａｔｅｍｅｎｔ Ｕｓｅ Ｔｈｅ ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔｓ ｔａｌｋｅｄ ａｂｏｕｔ ａｒｅ ｔｏｇｅｔｈｅｒ ａｎｄ ｓｅｐａｒａｔｅｌｙ ａｐｐｌｉｅｄ ｉｎ ｖａｒｉｏｕｓ ｗａｙｓ ｔｏ ａｉｄ ｉｎ ｔｈｅ ｐｌａｎｎｉｎｇ ａｎｄ ｃｏｎｔｒｏｌｌｉｎｇ ｏｆ ｆｕｔｕｒｅ ｏｐｅｒａｔｉｏｎｓ ａｓ ｔｈｅ ｐａｒｔｉｃｕｌａｒ ｉｎｆｏｒｍａｔｉｏｎ ｔｈａｔ ｒｅｓｕｌｔｓ ｆｒｏｍ ｔｈｅ ａｎａｌｙｓｉｓ ｗｉｌｌ ｐｒｏｖｉｄｅ ｔｈｅ ｃｏｍｐａｎｙ ｗｉｔｈ ｔｈｅ ｓｐｅｃｉｆｉｃ ｎｕｍｂｅｒｓ ｒｅｑｕｉｒｅｄ ｔｏ ｍａｋｅ ａｌｔｅｒａｔｉｏｎｓ ｔｏ ｔｈｅ ｏｐｅｒａｔｉｏｎａｌ ｐｒｏｃｅｓｓｅｓ ｏｆ ｔｈｅ ｂｕｓｉｎｅｓｓ. Ｔｈｉｓ ｗｉｌｌ ｅｎａｂｌｅ ｔｈｅ ｃｏｍｐａｎｙ ｔｏ ｉｍｐｒｏｖｅ ｔｈｅ ｏｖｅｒａｌｌ ｅｆｆｉｃｉｅｎｃｙ ｏｆ ｔｈｅ ｏｐｅｒａｔｉｏｎａｌ ｐｒｏｃｅｄｕｒｅｓ ｒｅｌａｔｅｄ ｔｏ ｔｈｅ ｂｕｓｉｎｅｓｓ. Ａｎａｌｙｓｉｓ ｏｆ ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔｓ ａｓ ｔｈｅｙ ａｐｐｌｙ ｔｏ ｐｒａｃｔｉｃｅｓ ｏｆ ｍａｎａｇｅｒｉａｌ ａｃｃｏｕｎｔｉｎｇ ｗｉｌｌ ｃｅｎｔｅｒ ｏｎ ｈｏｒｉｚｏｎｔａｌ, ｖｅｒｔｉｃａｌ, ａｎｄ ｒａｔｉｏ ａｎａｌｙｓｉｓ (ＣＴＵ Ｏｎｌｉｎｅ, 2011). Ｈｏｒｉｚｏｎｔａｌ Ａｎａｌｙｓｉｓ Ｈｏｒｉｚｏｎｔａｌ ａｎａｌｙｓｉｓ, ｗｈｉｃｈ ｉｓ ａｌｓｏ ｃａｌｌｅｄ ｔｒｅｎｄ ａｎａｌｙｓｉｓ, ｉｓ ｔｈｅ ａｎａｌｙｓｉｓ ｏｆ ｔｈｅ ｉｎｆｏｒｍａｔｉｏｎ ｆｒｏｍ ａ ｐａｒｔｉｃｕｌａｒ ｉｔｅｍ ｗｉｔｈｉｎ ａ ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔ ａｓ ｄｅｔａｉｌｅｄ ｏｖｅｒ ａ ｓｐｅｃｉｆｉｃ ｔｉｍｅ ｗｈｉｃｈ ｗｉｌｌ ｓｈｏｗ ｑｕａｒｔｅｒｌｙ ｏｒ ｙｅａｒｌｙ ａｌｔｅｒａｔｉｏｎｓ ｆｏｒ ｔｈｅ ｃｏｍｐａｎｙ ｉｎ ｒｅｌａｔｉｏｎ ｔｏ ｃａｓｈ ｏｒ ｐｅｒｃｅｎｔ ａｌｔｅｒａｔｉｏｎｓ. Ｐｅｒｃｅｎｔａｇｅ ｏｆ ｔｒｅｎｄ ｗｉｌｌ ｂｅ ｃｏｍｐｕｔｅｄ ｆｏｒ ｔｈｅ ｃｏｍｐａｎｙ ｗｈｅｎ ｅｖａｌｕａｔｉｎｇ ｍａｎｙ ｐｅｒｉｏｄｓ ａｎｄ ｃｏｍｐａｒｉｎｇ ｔｈｅｍ ａｇａｉｎｓｔ ａ ｓｐｅｃｉｆｉｃ ｙｅａｒ (Ｇａｒｒｉｓｏｎ, Ｎｏｒｅｅｎ, & Ｂｒｅｗｅｒ, 2010). Ｂｏｔｈ ｔｈｅ ｃａｓｈ ａｌｔｅｒａｔｉｏｎｓ ａｎｄ ｐｅｒｃｅｎｔａｇｅ ａｌｔｅｒａｔｉｏｎｓ ｗｈｉｃｈ ａｒｅ ａｓｓｏｃｉａｔｅｄ ｗｉｔｈ ｓｐｅｃｉｆｉｃ ａｒｅａｓ ｏｆ ｔｈｅ ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔ ａｎａｌｙｓｉｓ ｓｈｏｕｌｄ ｂｅ ｃｏｎｓｉｄｅｒｅｄ ｔｈｏｒｏｕｇｈｌｙ ｓｏ ｔｈａｔ ｏｎｅ ｒｅｓｕｌｔ ｉｓ ｎｏｔ ｇｉｖｅｎ ｇｒｅａｔｅｒ ｓｉｇｎｉｆｉｃａｎｃｅ ｔｈａｎ ｔｈｅ ｏｔｈｅｒ. Ｈｏｒｉｚｏｎｔａｌ ａｎａｌｙｓｉｓ ｗｉｌｌ ｐｒｏｄｕｃｅ ａｃｃｕｒａｔｅ ｐｌａｎｎｉｎｇ ａｎｄ ｂｕｄｇｅｔｉｎｇ ｓｏ ｔｈａｔ ｉｔ ｗｉｌｌ ｂｅ ｅｎｓｕｒｅｄ ｔｈａｔ ｔｈｅ ｒｅｓｏｕｒｃｅｓ ｎｅｃｅｓｓａｒｙ ａｒｅ ｒｅａｄｉｌｙ ａｖａｉｌａｂｌｅ ｗｈｅｎ ｔｈｅ ｄｅｍａｎｄｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ'ｓ ｐｅｒｆｏｒｍａｎｃｅ ｉｓ ｉｎｃｒｅａｓｅｄ (Ａｃｃｏｕｎｔｉｎｇ ｆｏｒ Ｍａｎａｇｅｍｅｎｔ, 2009). Ｖｅｒｔｉｃａｌ Ａｎａｌｙｓｉｓ Ｖｅｒｔｉｃａｌ ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔ ａｎａｌｙｓｉｓ ｗｉｌｌ ｆｏｃｕｓ ｏｎ ｅｖｅｒｙ ｅｎｔｒｙ ｆｏｒ ｅａｃｈ ｏｆ ｔｈｅ ｃａｔｅｇｏｒｉｅｓ ｏｆ ａｃｃｏｕｎｔｓ ｉｎ ｔｈｅ ｂａｌａｎｃｅ ｓｈｅｅｔ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ ｓｏ ｔｈａｔ ｅａｃｈ ａｃｃｏｕｎｔ ｉｓ ｒｅｐｒｅｓｅｎｔｅｄ ａｓ ａ ｐｒｏｐｏｒｔｉｏｎ ｏｆ ｔｈｅ ａｃｃｏｕｎｔ ｔｏｔａｌ. Ｔｈｉｓ ｉｎｆｏｒｍａｔｉｏｎ ｗｉｌｌ ｂｅ ｆｒｅｑｕｅｎｔｌｙ ｕｓｅｄ ｔｏ ｃｏｍｐａｒｅ ｔｈｅ ｃｏｍｐａｎｙ'ｓ ｐｅｒｆｏｒｍａｎｃｅ ｔｏ ｔｈｅ ａｖｅｒａｇｅｓ ｏｆ ｔｈｅ ｉｎｄｕｓｔｒｙ ｓｏ ｔｈａｔ ａｎｔｉｃｉｐａｔｅｄ ｇｏａｌｓ ｃａｎ ｂｅ ｒｅｃｏｇｎｉｚｅｄ. Ｔｈｅ ｉｎｃｏｍｅ ｓｔａｔｅｍｅｎｔ ｖｅｒｔｉｃａｌ ａｎａｌｙｓｉｓ ｃｏｕｌｄ ｒｅｖｅａｌ ｔｈｅ ｐｅｒｃｅｎｔａｇｅ ｏｆ ｔｏｔａｌ ｓａｌｅｓ ｒｅｌａｔｅｄ ｔｈｅ ｉｎｄｉｖｉｄｕａｌ ｄｉｖｉｓｉｏｎｓ ｏｒ ｐｒｏｄｕｃｔｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ. Ｔｈｅ ｓａｌｅｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ ｗｉｌｌ ｂｅ ｆｒｅｑｕｅｎｔｌｙ ｂｅ ｃｏｍｐａｒｅｄ ｔｏ ａ ｓｔａｎｄａｒｄ ｐｅｒｃｅｎｔａｇｅ ｗｈｉｃｈ ｗｉｌｌ ｂｅ ｔａｋｅｎ ｆｒｏｍ ｉｎｄｕｓｔｒｙ ｄａｔａ ｓｐｅｃｉｆｉｃａｌｌｙ, ｗｈｉｃｈ ｗｉｌｌ ｉｎ ｔｕｒｎ ｈｅｌｐ ｔｏ ａｓｓｅｓｓ ｔｈｅ ｃｏｍｐａｎｙ'ｓ ｐｅｒｆｏｒｍａｎｃｅ ｓｏ ｔｈａｔ ｉｔ ｃａｎ ｂｅ ｃｏｍｐａｒｅｄ ｗｉｔｈ ｒｅａｌ ｐｒｏｇｒｅｓｓ ｏｆ ｔｈｅ ｄｉｖｉｓｉｏｎｓ ａｎｄ/ｏｒ ｐｒｏｄｕｃｔｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ (Ｃｌａｕｓｅｎ, 2010). Ｒａｔｉｏ Ａｎａｌｙｓｉｓ Ａ ｒａｔｉｏ ａｎａｌｙｓｉｓ ｗｉｌｌ ｂｅ ｍｏｓｔ ｆｒｅｑｕｅｎｔｌｙ ｕｓｅｄ ｂｙ ｆｉｎａｎｃｉｅｒｓ ｏｒ ｏｔｈｅｒ ｏｕｔｓｉｄｅ ｄｅｃｉｓｉｏｎ ｍａｋｅｒｓ ｗｉｔｈ ａｎ ｉｍｐｅｎｄｉｎｇ ｒｉｓｋ ｉｎ ｔｈｅ ｏｐｅｒａｔｉｏｎｓ ａｎｄ ｐｅｒｆｏｒｍａｎｃｅ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ. Ｈｏｗｅｖｅｒ, ｓｉｎｃｅ ｍａｎａｇｅｍｅｎｔ ｗｉｌｌ ｎｅｅｄ ｔｏ ｉｄｅｎｔｉｆｙ ｈｏｗ ｔｈｅ ｐｅｒｆｏｒｍａｎｃｅ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ ｉｓ ｄｏｉｎｇ ａｎｄ ｈｏｗ ｉｔ ｉｓ ｏｂｓｅｒｖｅｄ ｏｎ ｔｈｅ ｏｕｔｓｉｄｅ ｔｈｅｙ ｃａｎ ｄｏ ｔｈｉｓ ｂｙ ｐｅｒｆｏｒｍｉｎｇ ａ ｒａｔｉｏ ａｎａｌｙｓｉｓ. Ｔｈｉｓ ｔｙｐｅ ｏｆ ａｎａｌｙｓｉｓ ｗｉｌｌ ｃｏｍｐａｒｅ ｔｈｅ ｓｉｇｎｉｆｉｃａｎｔ ｎｕｍｂｅｒｓ ｗｉｔｈｉｎ ｔｈｅ ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ. Ｈａｖｉｎｇ ｋｎｏｗｌｅｄｇｅ ｏｆ ｔｈｅ ｐｅｒｆｏｒｍａｎｃｅ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ ａｎｄ ｈｏｗ ｔｈｅ ｃｏｍｐａｎｙ ｉｓ ｖｉｅｗｅｄ ｂｙ ｏｔｈｅｒｓ ｗｉｌｌ ｐｒｅｓｅｎｔ ｍａｎａｇｅｍｅｎｔ ｗｉｔｈ ｉｎｆｏｒｍａｔｉｏｎ ｏｎ ｗｈａｔ ｔｈｅ ｄｅｓｉｒｅｄ ｌｅｖｅｌｓ ｏｆ ｐｅｒｆｏｒｍａｎｃｅ ｉｎ ｅｖｅｒｙ ａｒｅａ ｍｉｇｈｔ ｂｅ. Ｕｎｄｅｒｓｔａｎｄｉｎｇ ｔｈｅ ｐｅｒｆｏｒｍａｎｃｅ ｉｎ ｅｖｅｒｙ ａｒｅａ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ ｗｉｌｌ ａｌｌｏｗ ｍａｎａｇｅｍｅｎｔ ｔｏ ｒｅｃｏｇｎｉｚｅ ｐｒｏｂｌｅｍ ａｒｅａｓ ａｎｄ ｔｈｅｙ ｗｉｌｌ ｂｅ ｇｉｖｅｎ ｔｈｅ ｏｐｐｏｒｔｕｎｉｔｙ ｔｏ ｃｏｒｒｅｃｔ ｔｈｅｓｅ ａｒｅａｓ ｓｏ ｔｈａｔ ａ ｍｏｒｅ ｄｅｓｉｒａｂｌｅ ｉｎｖｅｓｔｍｅｎｔ ｏｐｐｏｒｔｕｎｉｔｙ ｍａｙ ａｒｉｓｅ (ＣＴＵ Ｏｎｌｉｎｅ, 2011). Ｎｕｍｅｒｏｕｓ ｒａｔｉｏｎｓ ａｒｅ ａｐｐｌｉｅｄ ｔｏ ｔｈｅ ｎｕｍｂｅｒｓ ｏｎ ｔｈｅ ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔ ｔｏ ｅｓｔａｂｌｉｓｈ ｐｒｏｄｕｃｔｉｖｉｔｙ ｆｏｒ ｔｈｅ ｃｏｍｐａｎｙ, ｅｆｆｉｃｉｅｎｃｙ ｒｅｌａｔｅｄ ｔｏ ｏｐｅｒａｔｉｏｎｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ, ｍｏｎｅｔａｒｙ ｃｏｎｔｒｏｌ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ, ａｎｄ ｕｓｅ ｏｆ ａｓｓｅｔｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ (Ａｔｋｉｎｓｏｎ, Ｋａｐｌａｎ, Ｍａｔｓｕｍｕｒａ, & Ｙｏｕｎｇ, 2007). Ｃｏｎｃｌｕｓｉｏｎ Ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔｓ ａｒｅ ｒｅｐｏｒｔｓ ｔｈａｔ ｗｉｌｌ ｓｕｍｍａｒｉｚｅ ｔｈｅ ｆｉｎａｎｃｉａｌ ｃｏｎｄｉｔｉｏｎ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ ａｔ ｓｐｅｃｉｆｉｃ ｔｉｍｅｓ. Ｔｈｅ ｒｏｌｅ ｏｆ ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔｓ ｉｓ ｔｏ ｐｒｏｖｉｄｅ ｆｉｎａｎｃｉａｌ ｉｎｆｏｒｍａｔｉｏｎ ｔｏ ｅｘｅｃｕｔｉｖｅｓ ｓｏ ｔｈａｔ ｔｈｅｙ ｃａｎ ｃｏｍｐｌｅｔｅ ｔｈｅｉｒ ｍａｎｙ ｒｅｓｐｏｎｓｉｂｉｌｉｔｉｅｓ ｗｈｉｌｅ ｃｏｎｔｉｎｕｉｎｇ ｆｉｎａｎｃｉａｌ ｓｕｃｃｅｓｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ. Ａｌｌ ｏｆ ｔｈｅ ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔｓ ｐｒｅｖｉｏｕｓｌｙ ｍｅｎｔｉｏｎｅｄ ａｒｅ ｉｎｔｅｒ-ｒｅｌａｔｅｄ ａｎｄ ｗｉｌｌ ｐｌａｙ ａ ｖｉｔａｌ ｒｏｌｅ ｉｎ ｔｈｅ ｆｉｎａｎｃｉａｌ ｄｅｃｉｓｉｏｎ ｍａｋｉｎｇ ｐｒｏｃｅｓｓ ｆｏｒ ｅｘｅｃｕｔｉｖｅｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ. Ｒｅｆｅｒｅｎｃｅｓ Ａｃｃｏｕｎｔｉｎｇ ｆｏｒ ｍａｎａｇｅｍｅｎｔ. Ｈｏｒｉｚｏｎｔａｌ ａｎａｌｙｓｉｓ ｏｒ ｔｒｅｎｄ ａｎａｌｙｓｉｓ: Ｄｅｆｉｎｉｔｉｏｎ ａｎｄ ｅｘｐｌａｎａｔｉｏｎ ｏｆ ｈｏｒｉｚｏｎｔａｌ ｏｒ ｔｒｅｎｄ ａｎａｌｙｓｉｓ. Ｒｅｔｒｉｅｖｅｄ ｆｒｏｍ ｈｔｔｐ://ｗｗｗ.ａｃｃｏｕｎｔｉｎｇｆｏｒｍａｎａｇｅｍｅｎｔ.ｃｏｍ/ｈｏｒｉｚｏｎｔａｌ_ａｎａｌｙｓｉｓ_ｏｒ_ｔｒｅｎｄ_ａｎａｌｙｓｉｓ.ｈｔｍ Ａｔｋｉｎｓｏｎ, Ａ., Ｋａｐｌａｎ, Ｒ., Ｍａｔｓｕｍｕｒａ, Ｅ., & Ｙｏｕｎｇ, Ｓ. (2007). Ｍａｎａｇｅｍｅｎｔ ａｃｃｏｕｎｔｉｎｇ. (5ｔｈ ｅｄ.). Ｕｐｐｅｒ Ｓａｄｄｌｅ Ｒｉｖｅｒ, ＮＪ: Ｐｅａｒｓｏｎ-Ｐｒｅｎｔｉｃｅ Ｈａｌｌ. Ｂｅｓｔ, Ｂ. (ｎ.ｄ.). Ｔｈｅ ｕｓｅ ｏｆ ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔｓ. Ｒｅｔｒｉｅｖｅｄ ｆｒｏｍ ｈｔｔｐ://ｗｗｗ.ｂｅｎｂｅｓｔ.ｃｏｍ/ｂｕｓｉｎｅｓｓ/ｆｉｎａｎｃｅ.ｈｔｍｌ Ｃｌａｕｓｅｎ, Ｊ. (2010). Ａｃｃｏｕｎｔｉｎｇ 101 ｂａｓｉｃｓ - ｖｅｒｔｉｃａｌ ａｎａｌｙｓｉｓ. Ｒｅｔｒｉｅｖｅｄ ｆｒｏｍ ｈｔｔｐ://ｗｗｗ.ｓｕｉｔｅ101.ｃｏｍ/ｃｏｎｔｅｎｔ/ａｃｃｏｕｎｔｉｎｇ101-ｂａｓｉｃｓ---ｖｅｒｔｉｃａｌ-ａｎａｌｙｓｉｓ-ａ204428 ＣＴＵ Ｏｎｌｉｎｅ. (2011). Ａｐｐｌｉｅｄ ｍａｎａｇｅｒｉａｌ ａｃｃｏｕｎｔｉｎｇ: Ｐｈａｓｅ 1 Ｃｏｕｒｓｅ Ｍａｔｅｒｉａｌ [ｔｅｘｔ]. Ｃｏｌｏｒａｄｏ Ｓｐｒｉｎｇｓ, ＣＯ: ＣＴＵ Ｏｎｌｉｎｅ. Ｒｅｔｒｉｅｖｅｄ Ｊａｎｕａｒｙ 04, 2011, ｆｒｏｍ ｈｔｔｐｓ://ｃａｍｐｕｓ.ｃｔｕｏｎｌｉｎｅ.ｅｄｕ/ＭａｉｎＦｒａｍｅ.ａｓｐｘ?ＣｏｎｔｅｎｔＦｒａｍｅ=/Ｄｅｆａｕｌｔ.ａｓｐｘ Ｇａｒｒｉｓｏｎ, Ｒ., Ｎｏｒｅｅｎ, Ｅ., & Ｂｒｅｗｅｒ, Ｐ. (2010). Ｍａｎａｇｅｒｉａｌ ａｃｃｏｕｎｔｉｎｇ, (13ｔｈ ｅｄ.). Ｎｅｗ Ｙｏｒｋ, ＮＹ: ＭｃＧｒａｗ-Ｈｉｌｌ Ｉｒｗｉｎ. Ｕ.Ｓ. Ｓｅｃｕｒｉｔｉｅｓ ａｎｄ Ｅｘｃｈａｎｇｅ Ｃｏｍｍｉｓｓｉｏｎ. (2007). Ｂｅｇｉｎｎｅｒｓ ｇｕｉｄｅ ｔｏ ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔｓ. Ｒｅｔｒｉｅｖｅｄ ｆｒｏｍ ｈｔｔｐ://ｗｗｗ.ｓｅｃ.ｇｏｖ/ｉｎｖｅｓｔｏｒ/ｐｕｂｓ/ｂｅｇｆｉｎｓｔｍｔｇｕｉｄｅ.ｈｔｍ |
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