14
Financial Statement Analysis
Learning Goals
Construct and interpret horizontal and vertical analyses.Calculate and interpret the rate earned on stockholders’
equity and the rate earned on total assets.Analyze the rate earned on total assets by evaluating
the profit margin and the asset efficiency of a business.Determine and interpret leverage.Calculate and interpret shareholder ratios: earnings per
share, price-earnings ratio, and dividend yield.Summarize the uses and limitations of analytical measures.Describe the contents of corporate annual reports.