Principle of accounting

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Business Finance

Description

Assignment 1: Discussion

By the due date assigned, respond to the following in the Discussion Area below:

Managers use a variety of tools to analyze a company’s financial position. Horizontal, vertical, and ratio analyses are three important tools.

  • Describe how each contributes to the analysis process.
  • Discuss both the mechanics of the method as well as the information gleaned.
  • Please give an example of how each method might be used to make a business decision.
  • Be sure to discuss what the company’s information should be compared against to determine the financial health of the company.

Be sure to cite any sources using APA style. You may use this APA Citation Helper as a guide.

Through the end of the module, provide substantive responses to at least two other students' initial posts. Be sure to post to the Discussion Area on two different days to meet your weekly attendance requirement.

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Explanation & Answer

Attached.

Running head: TOOLS OF FINANCIAL ANALYSIS

Tools of financial analysis
Name
Institution
Course

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TOOLS OF FINANCIAL ANALYSIS

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Introduction
When someone is starting any kind of business, they want to benefit from it. This
means that profits from any investments are of great importance. Therefore, among the key
areas to analyze frequently is the financial sector. There are various ways to analyze finances,
among them, the use of financial analysis tools. (Helfert, 2001)
There are three critical apparatuses used to investigate an organization's money
related position are: Horizontal, vertical and ratio analysis.
1. Ratio analysis- it is used to gauge the strengths as well as weaknesses of the
company. Also, the more experienced use it to give customers advice. Ratio analysis
is a crucial or quantitative investigation used to assess the execution of an
organiza...


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