Ratio analysis

- In this section, we will discuss how … common external financial reports … are used by those who are standing on the outside … of a company and trying to assess the financial viability … on the inside of a company. … Of course, it would be preferable … if we could just get inside the company … to do our analysis. … But companies do not like outsiders … poking around on the inside of their company. … There's just too much proprietary information … that they do not want exposed to outsiders. … Things like cost structure, pricing margins, … and R and D efforts, to name a few. … We must make do with the information that is available. … Another point to keep in mind … is that the analysis techniques … that we will practice on the external financial statements … can be developed and applied within a firm, … using proprietary firm-specific information. … In other words, we will practice the techniques … on commonly available information … and you can develop unique techniques … within your company for analyzing …