From the course: Financial Accounting Part 2
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Comparing financial statements across time
From the course: Financial Accounting Part 2
Comparing financial statements across time
- Consider the following questions regarding Ford's 2017 financial statement information. Ford's net income in 2017 was $7.6 billion. That seems like a lot, but is it a large amount for a company of Ford's size? Total assets at the end of 2017 were 258 billion. Given the volume of business that Ford does, is this amount of assets too much, too little, or just right? By the end of 2017, liabilities for Ford totaled $229 billion. Is this level of debt too much for Ford? Just having the financial statement numbers is not enough to answer the questions that financial statement users want answered. Without further analysis, the raw numbers themselves don't tell much of a story. Financial statement analysis involves the examination of both the relationship among financial statement numbers and the trends in those numbers over time. Viewing these trends allows a company to predict how it will do in the future. Financial…
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