BKAF5063: Assignment 1 Topic 1 & 2 Submission Date: 22/9/2013 Topic 1: Overview of Financial Statement Analysis 1.1 1.2 1.

.3 1.4 Describe business analysis and identify its objectives. Describe the different types of business analysis. Identify the category of users of financial statements that applies to each different type of business. Identify and discuss the five elements of financial statements of a business. Explain why financial statements are important to the decision-making process in financial analysis. Also identify and discuss some of their limitations for analysis purposes. Identify and describe at least four categories of financial analysis tools.

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Topic 2: Financial Reporting & Analysis 2.1 Why are earnings announcements made in advance of the release of financial statements? What information do they contain and how are they different from financial statements? Describe the criteria necessary for a business to record revenue. Explain when costs should be recognized as expenses. What are the two basic economic concepts of income? What implications do they have for analysis? What gives rise to accounting distortions? Explain Explain what is meant by the term earnings management and what incentives managers have to engage in earnings management.

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