SlideShare a Scribd company logo
#1
Financial statement analysis plays an important role in the
balance and security of the economy in that financial statements
are used in a variety of faculties by a great many different
users. “Financial statements are demanded because of their
value as a source of information about the company’s
performance, financial condition, and resource stewardship
(Revsine et al, 2018, p. 1-3).” As such, when there is little
confidence in the application and reliability of financial
statements there becomes a lack of investing in the economy by
consumers and investors. According to Rezaee (2017, p. xi), as
a result of the global financial crisis that was brought on by
Enron, WorldCom and others that perpetrated enormous
financial scandals, regulators of corporate financial statements
really began focusing on better understanding how to identify
malfeasance through more thorough financial statement
analysis.
Through the process of analyzing financial statements
there is much that is to be gleaned from the information that is
provided by straightforward reporting. As previously
mentioned, financial statements are a means through which
users seek information for decision making. “The primary
objective of capital markets is the allocation of financial
resources (Gruber, 2014, p. 13),” When there is confidence in
the financial reports, there are those that are willing to sow into
the economy. Financial analysts that provide feedback and
thorough evaluations provide a necessary service for internal
use for budgeting, decisions on investments or shifts in
business, bonus’, and so forth. It is important for a company to
decide what information will be made available as public
knowledge on their financial statements, the information can
either help or hinder the company (Revsine et al, p. 1-3).
Jesus said to the Jews in John 8:32 (NKJV) that if they
followed his teachings that the truth would set them free.
Although, this is not a straight-line application of what he was
talking about, I believe that truth equaling freedom is a
universal reality, as truth in financial statement analysis is an
example of this in that greater understanding brings wisdom and
thus results in wise decision making whether it is by a bank, an
investor, or shareholders.
References
Grüber S. (2015). The fundamentals of financial accounting and
reporting. In: Intangible Values in Financial Accounting and
Reporting. Springer Gabler, Wiesbaden. https://doi-
org.ezproxy.liberty.edu/10.1007/978-3-658-06550-8_2
Holman Bible Publishers. (2013). Holy Bible: New King James
version.
Revsine, L., Collins, D.W., Johnson, W.B., Mittelstaedt, H.F.,
& Soffer, L.C. (2018). Financial
reporting & analysis. McGraw Hill Education (8th ed.).
Rezaee, Zabihollah. (2017) Forensic accounting and financial
statement fraud. volume I,
fundamentals of forensic accounting. New York, NY: Business
Expert Press, 2019. Print.
#2
Financial statement analysis is an evaluation of finance
statement numbers and trends over time.
“If you want to know more about a company, its past
performance, current health, and prospects for the future, the
best source of information is the company’s own financial
statements” (Resvine et.al, 2020).
These statements include balance sheets, income statements,
cash flow statements, and statements of shareholders’ equity.
Financial statements are used to identify issues within a
particular area. Once all the information is gathered investors
use these documents to decide whether or not it is a smart
choice to go into business with particular companies. “Complete
information provided by reliable sources enhances the
probability that the best decisions will be made” (Resvine et.
al., 2020). These statements are then used to evaluate trends and
predict future outcomes “Financial statements provide a basis
for evaluating what happened in the past and projecting what
might occur in the future” (Resvine et. al., 2020). “Trends and
relationships provide insights into a company’s economic
opportunities and risks including market acceptance, costs,
productivity, profitability and liquidity” (Resvine et.al., 2020).
Faithful representation Is the concept that financial statements
be produced that accurately reflect the condition of a business.
“Financial account is a moral science. It is the science of
stewards telling the truth to the owners towards whom they have
ethical obligation to give an account” (Bowyer, 2017) Much of
the bible is written in regard to being a steward and acting on
good faith. “It is required in stewards, that a man be found
faithful.” (1 Corinthians 4:2 KJV). Being transparent and honest
when generating financial statements goes hand in hand with the
Biblical implications of reliable and representationally faithful
financial statements.
References
Bowyer, J. (2017). The Theology of Financial Accounting.
Retrieved on January 25th, 2021
from https://www.forbes.com/sites/jerrybowyer/2017/08/18/the-
theology-of-financial-accounting/?sh=20a7a53efd74
Holy Bible. King James Version
Resvine, L., Collins, D. W., Johnson, W. B., Mittelstaedt, H. F.,
& Soffer, L. C. (2020). Financial reporting and analysis (8th
ed.). New Yo

More Related Content

More from MoseStaton39

(Monica)Gender rarely shapes individual experience in isolation bu
(Monica)Gender rarely shapes individual experience in isolation bu(Monica)Gender rarely shapes individual experience in isolation bu
(Monica)Gender rarely shapes individual experience in isolation bu
MoseStaton39
 
(Monica) A summary of my decision-making process starts with flipp
(Monica) A summary of my decision-making process starts with flipp(Monica) A summary of my decision-making process starts with flipp
(Monica) A summary of my decision-making process starts with flipp
MoseStaton39
 
(Note This case study is based on many actual cases. All the name
(Note This case study is based on many actual cases. All the name(Note This case study is based on many actual cases. All the name
(Note This case study is based on many actual cases. All the name
MoseStaton39
 
(Minimum 175 words)In your own words, explain class conflict the
(Minimum 175 words)In your own words, explain class conflict the(Minimum 175 words)In your own words, explain class conflict the
(Minimum 175 words)In your own words, explain class conflict the
MoseStaton39
 
(Individuals With Disabilities Act Transformation Over the Years)D
(Individuals With Disabilities Act Transformation Over the Years)D(Individuals With Disabilities Act Transformation Over the Years)D
(Individuals With Disabilities Act Transformation Over the Years)D
MoseStaton39
 
(Kaitlyn)To be very honest I know next to nothing about mythology,
(Kaitlyn)To be very honest I know next to nothing about mythology,(Kaitlyn)To be very honest I know next to nothing about mythology,
(Kaitlyn)To be very honest I know next to nothing about mythology,
MoseStaton39
 
(Harry)Dante’s Inferno is the first of the three-part epic poem, D
(Harry)Dante’s Inferno is the first of the three-part epic poem, D(Harry)Dante’s Inferno is the first of the three-part epic poem, D
(Harry)Dante’s Inferno is the first of the three-part epic poem, D
MoseStaton39
 
(Lucious)Many steps in the systems development process may cause a
(Lucious)Many steps in the systems development process may cause a(Lucious)Many steps in the systems development process may cause a
(Lucious)Many steps in the systems development process may cause a
MoseStaton39
 
(Eric)Technology always seems simple when it works and it is when
(Eric)Technology always seems simple when it works and it is when (Eric)Technology always seems simple when it works and it is when
(Eric)Technology always seems simple when it works and it is when
MoseStaton39
 
(ELI)At the time when I first had to take a sociology class in hig
(ELI)At the time when I first had to take a sociology class in hig(ELI)At the time when I first had to take a sociology class in hig
(ELI)At the time when I first had to take a sociology class in hig
MoseStaton39
 
(Click icon for citation) Theme Approaches to History
(Click icon for citation) Theme Approaches to History(Click icon for citation) Theme Approaches to History
(Click icon for citation) Theme Approaches to History
MoseStaton39
 
(Executive Summary)MedStar Health Inc, a leader in the healthc
(Executive Summary)MedStar Health Inc, a leader in the healthc(Executive Summary)MedStar Health Inc, a leader in the healthc
(Executive Summary)MedStar Health Inc, a leader in the healthc
MoseStaton39
 
(Diquan)Analog Transmission of Digital DataBefore describing the
(Diquan)Analog Transmission of Digital DataBefore describing the(Diquan)Analog Transmission of Digital DataBefore describing the
(Diquan)Analog Transmission of Digital DataBefore describing the
MoseStaton39
 
(Christopher)With packet-switched networks its services allow mult
(Christopher)With packet-switched networks its services allow mult(Christopher)With packet-switched networks its services allow mult
(Christopher)With packet-switched networks its services allow mult
MoseStaton39
 
(Chelsey)Das Bett, Katharina Grosse, 2004, Acrylic on various obje
(Chelsey)Das Bett, Katharina Grosse, 2004, Acrylic on various obje(Chelsey)Das Bett, Katharina Grosse, 2004, Acrylic on various obje
(Chelsey)Das Bett, Katharina Grosse, 2004, Acrylic on various obje
MoseStaton39
 
(1) See page 20 for a discussion of non-IFRS measures.(2
(1) See page 20 for a discussion of non-IFRS measures.(2(1) See page 20 for a discussion of non-IFRS measures.(2
(1) See page 20 for a discussion of non-IFRS measures.(2
MoseStaton39
 
(Adams) While a database may seem like the solution to all data st
(Adams) While a database may seem like the solution to all data st(Adams) While a database may seem like the solution to all data st
(Adams) While a database may seem like the solution to all data st
MoseStaton39
 
(Adam)In an example like the Odebrecht case study from the book, i
(Adam)In an example like the Odebrecht case study from the book, i(Adam)In an example like the Odebrecht case study from the book, i
(Adam)In an example like the Odebrecht case study from the book, i
MoseStaton39
 
(Alex)There are four phases of the systems development life cycle
(Alex)There are four phases of the systems development life cycle (Alex)There are four phases of the systems development life cycle
(Alex)There are four phases of the systems development life cycle
MoseStaton39
 
(2) conditions for language and literacy developmentConditio
(2) conditions for language and literacy developmentConditio(2) conditions for language and literacy developmentConditio
(2) conditions for language and literacy developmentConditio
MoseStaton39
 

More from MoseStaton39 (20)

(Monica)Gender rarely shapes individual experience in isolation bu
(Monica)Gender rarely shapes individual experience in isolation bu(Monica)Gender rarely shapes individual experience in isolation bu
(Monica)Gender rarely shapes individual experience in isolation bu
 
(Monica) A summary of my decision-making process starts with flipp
(Monica) A summary of my decision-making process starts with flipp(Monica) A summary of my decision-making process starts with flipp
(Monica) A summary of my decision-making process starts with flipp
 
(Note This case study is based on many actual cases. All the name
(Note This case study is based on many actual cases. All the name(Note This case study is based on many actual cases. All the name
(Note This case study is based on many actual cases. All the name
 
(Minimum 175 words)In your own words, explain class conflict the
(Minimum 175 words)In your own words, explain class conflict the(Minimum 175 words)In your own words, explain class conflict the
(Minimum 175 words)In your own words, explain class conflict the
 
(Individuals With Disabilities Act Transformation Over the Years)D
(Individuals With Disabilities Act Transformation Over the Years)D(Individuals With Disabilities Act Transformation Over the Years)D
(Individuals With Disabilities Act Transformation Over the Years)D
 
(Kaitlyn)To be very honest I know next to nothing about mythology,
(Kaitlyn)To be very honest I know next to nothing about mythology,(Kaitlyn)To be very honest I know next to nothing about mythology,
(Kaitlyn)To be very honest I know next to nothing about mythology,
 
(Harry)Dante’s Inferno is the first of the three-part epic poem, D
(Harry)Dante’s Inferno is the first of the three-part epic poem, D(Harry)Dante’s Inferno is the first of the three-part epic poem, D
(Harry)Dante’s Inferno is the first of the three-part epic poem, D
 
(Lucious)Many steps in the systems development process may cause a
(Lucious)Many steps in the systems development process may cause a(Lucious)Many steps in the systems development process may cause a
(Lucious)Many steps in the systems development process may cause a
 
(Eric)Technology always seems simple when it works and it is when
(Eric)Technology always seems simple when it works and it is when (Eric)Technology always seems simple when it works and it is when
(Eric)Technology always seems simple when it works and it is when
 
(ELI)At the time when I first had to take a sociology class in hig
(ELI)At the time when I first had to take a sociology class in hig(ELI)At the time when I first had to take a sociology class in hig
(ELI)At the time when I first had to take a sociology class in hig
 
(Click icon for citation) Theme Approaches to History
(Click icon for citation) Theme Approaches to History(Click icon for citation) Theme Approaches to History
(Click icon for citation) Theme Approaches to History
 
(Executive Summary)MedStar Health Inc, a leader in the healthc
(Executive Summary)MedStar Health Inc, a leader in the healthc(Executive Summary)MedStar Health Inc, a leader in the healthc
(Executive Summary)MedStar Health Inc, a leader in the healthc
 
(Diquan)Analog Transmission of Digital DataBefore describing the
(Diquan)Analog Transmission of Digital DataBefore describing the(Diquan)Analog Transmission of Digital DataBefore describing the
(Diquan)Analog Transmission of Digital DataBefore describing the
 
(Christopher)With packet-switched networks its services allow mult
(Christopher)With packet-switched networks its services allow mult(Christopher)With packet-switched networks its services allow mult
(Christopher)With packet-switched networks its services allow mult
 
(Chelsey)Das Bett, Katharina Grosse, 2004, Acrylic on various obje
(Chelsey)Das Bett, Katharina Grosse, 2004, Acrylic on various obje(Chelsey)Das Bett, Katharina Grosse, 2004, Acrylic on various obje
(Chelsey)Das Bett, Katharina Grosse, 2004, Acrylic on various obje
 
(1) See page 20 for a discussion of non-IFRS measures.(2
(1) See page 20 for a discussion of non-IFRS measures.(2(1) See page 20 for a discussion of non-IFRS measures.(2
(1) See page 20 for a discussion of non-IFRS measures.(2
 
(Adams) While a database may seem like the solution to all data st
(Adams) While a database may seem like the solution to all data st(Adams) While a database may seem like the solution to all data st
(Adams) While a database may seem like the solution to all data st
 
(Adam)In an example like the Odebrecht case study from the book, i
(Adam)In an example like the Odebrecht case study from the book, i(Adam)In an example like the Odebrecht case study from the book, i
(Adam)In an example like the Odebrecht case study from the book, i
 
(Alex)There are four phases of the systems development life cycle
(Alex)There are four phases of the systems development life cycle (Alex)There are four phases of the systems development life cycle
(Alex)There are four phases of the systems development life cycle
 
(2) conditions for language and literacy developmentConditio
(2) conditions for language and literacy developmentConditio(2) conditions for language and literacy developmentConditio
(2) conditions for language and literacy developmentConditio
 

#1Financial statement analysis plays an important role in the ba

  • 1. #1 Financial statement analysis plays an important role in the balance and security of the economy in that financial statements are used in a variety of faculties by a great many different users. “Financial statements are demanded because of their value as a source of information about the company’s performance, financial condition, and resource stewardship (Revsine et al, 2018, p. 1-3).” As such, when there is little confidence in the application and reliability of financial statements there becomes a lack of investing in the economy by consumers and investors. According to Rezaee (2017, p. xi), as a result of the global financial crisis that was brought on by Enron, WorldCom and others that perpetrated enormous financial scandals, regulators of corporate financial statements really began focusing on better understanding how to identify malfeasance through more thorough financial statement analysis. Through the process of analyzing financial statements there is much that is to be gleaned from the information that is provided by straightforward reporting. As previously mentioned, financial statements are a means through which users seek information for decision making. “The primary objective of capital markets is the allocation of financial resources (Gruber, 2014, p. 13),” When there is confidence in the financial reports, there are those that are willing to sow into the economy. Financial analysts that provide feedback and thorough evaluations provide a necessary service for internal use for budgeting, decisions on investments or shifts in business, bonus’, and so forth. It is important for a company to decide what information will be made available as public knowledge on their financial statements, the information can either help or hinder the company (Revsine et al, p. 1-3). Jesus said to the Jews in John 8:32 (NKJV) that if they followed his teachings that the truth would set them free.
  • 2. Although, this is not a straight-line application of what he was talking about, I believe that truth equaling freedom is a universal reality, as truth in financial statement analysis is an example of this in that greater understanding brings wisdom and thus results in wise decision making whether it is by a bank, an investor, or shareholders. References Grüber S. (2015). The fundamentals of financial accounting and reporting. In: Intangible Values in Financial Accounting and Reporting. Springer Gabler, Wiesbaden. https://doi- org.ezproxy.liberty.edu/10.1007/978-3-658-06550-8_2 Holman Bible Publishers. (2013). Holy Bible: New King James version. Revsine, L., Collins, D.W., Johnson, W.B., Mittelstaedt, H.F., & Soffer, L.C. (2018). Financial reporting & analysis. McGraw Hill Education (8th ed.). Rezaee, Zabihollah. (2017) Forensic accounting and financial statement fraud. volume I, fundamentals of forensic accounting. New York, NY: Business Expert Press, 2019. Print. #2 Financial statement analysis is an evaluation of finance statement numbers and trends over time. “If you want to know more about a company, its past performance, current health, and prospects for the future, the best source of information is the company’s own financial statements” (Resvine et.al, 2020). These statements include balance sheets, income statements, cash flow statements, and statements of shareholders’ equity. Financial statements are used to identify issues within a particular area. Once all the information is gathered investors use these documents to decide whether or not it is a smart
  • 3. choice to go into business with particular companies. “Complete information provided by reliable sources enhances the probability that the best decisions will be made” (Resvine et. al., 2020). These statements are then used to evaluate trends and predict future outcomes “Financial statements provide a basis for evaluating what happened in the past and projecting what might occur in the future” (Resvine et. al., 2020). “Trends and relationships provide insights into a company’s economic opportunities and risks including market acceptance, costs, productivity, profitability and liquidity” (Resvine et.al., 2020). Faithful representation Is the concept that financial statements be produced that accurately reflect the condition of a business. “Financial account is a moral science. It is the science of stewards telling the truth to the owners towards whom they have ethical obligation to give an account” (Bowyer, 2017) Much of the bible is written in regard to being a steward and acting on good faith. “It is required in stewards, that a man be found faithful.” (1 Corinthians 4:2 KJV). Being transparent and honest when generating financial statements goes hand in hand with the Biblical implications of reliable and representationally faithful financial statements. References Bowyer, J. (2017). The Theology of Financial Accounting. Retrieved on January 25th, 2021 from https://www.forbes.com/sites/jerrybowyer/2017/08/18/the- theology-of-financial-accounting/?sh=20a7a53efd74 Holy Bible. King James Version Resvine, L., Collins, D. W., Johnson, W. B., Mittelstaedt, H. F., & Soffer, L. C. (2020). Financial reporting and analysis (8th