>This is a summary of the first chapter from the book entitled “Financial Analysis tools and techniques” from Erich A. Elfert
Financial accounting
Profit determination
· Revenue recognition
· Expense recognition
· Cost allocation
· Profit definition
Value Determination
· Historical costs
· Conservatism
· Equity as residual value
· Contingency recognition
Tax determination
· Legal data requirements
· Income/expense timing
· Tax management issues
· Statement adjustments
Investor analysis
Financial information
· Adjustment process
· Trend analysis
· Project projection
· Cash flow projection
Comparative Data
· Industry analysis
· Competitor analysis
· Economic conditions
· Adjustment areas
Market analysis
· Share price patterns
· Market trends
· Value drivers
· Market models
Managerial Economics
Activity economics
· Task analysis
· Economic allocation
· Contribution Analysis
· Trade-off determination
Resources effectiveness
· Investment base
· Capital Investment
· Human resources
Shareholder value creation
· Cash flow patterns
· Cost of capital
· Investor expectation
· Ongoing business value
