Acca financial Accounting (FA) Study Text ac ca (FA)

Statement of cash flows 

378

 

KAPLAN PUBLISHING

 

 

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KAPLAN PUBLISHING

 

379 

Interpretation of financial 

statements 

Chapter learning objectives 

Upon completion of this chapter you will be able to: 

•

 

describe how the interpretation and analysis of financial 

statements is used in a business environment 

•

 

explain the purpose of the interpretation of ratios 

•

 

calculate and interpret the relationship between the following 

key accounting ratios 

– profitability 

– liquidity 

– efficiency 

– position 

•

 

explain the interrelationships between ratios 

•

 

draw valid conclusions from the information contained within 

the financial statements. 

 

 

 

Chapter 

20 

 

PER

 

One of the PER performance objectives (PO8) is 

to analyse financial statements to evaluate and 

assess the financial performance and position of 

an entity. Working through this chapter should 

help you understand how to demonstrate that 

objective. 

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