Learn how studying and analyzing the historical performance of a company allows financial statement users to project the future performance of a company.
- A common criticism I hear about accounting…is that it's too focused on the past,…it's about the financial history of a company.…Well, managers and investors…don't want to know about the past,…they want to know about the future,…and accounting leans too heavily on the past.…- I'm going to go with Winston Churchill on this topic.…He said, "The farther back you can look,…"the further forward you are likely to see."…Churchill, a student of history,…understood that studying the past…allowed one an educated glimpse into the uncertain future.…
- Studying and analyzing the historical…performance of a company allows financial statement users…to project the future performance of a company.…We make some reasonable assumptions…about a company's future performance…and it is fairly straightforward…to see what future financial statements might look like.…- So, let's discuss forecasting…a company's income statement.…But the same concepts would apply…if we were looking at the balance sheet.…To begin, we recognize that the amount of some expenses…
Skill Level Beginner
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