The emphasis in the Practical Guide to Company Analysis is on the application of the techniques and the interpretation of their results, although a certain amount of theory is required in order to explain the methods. The chapters are ordered in a logical sequence, the sequence in which data analysis might be carried out – from planning an experiment through examining and displaying the data to constructing quantitative models. These parts are, of course, interconnected, but we believe that the division provides a convenient teaching device to guide the reader through the learning material.
A brief outline of each part is given below:
Chapter I – Profit Analysis – provides the practical steps to quantitative and qualitative factorial modifications of one of the most synthetic indicators in company analysis which is the Profit;
Chapter II – Break Even Point Analysis – explores both methods of calculating the break-even as well as all the other indicators that are critical for the correct understanding of this topic;
Chapter III – Financial Statement Analysis – examines the issues, tools and techniques associated with implementing a chosen strategy and managing the process to improve the chances of mobilization of internal reserves of the company.
Chapter IV – Profit and Loss (P & L) Analysis. The function of a P & L statement is to total all sources of revenue and subtract all expenses related to the revenue. It shows a company's financial progress during the time period being examined.
Chapter V – Cash Flow Statement Analysis. The purpose of the statement of cash flows analysis is to highlight the major activities that directly and indirectly impact cash flows and hence affect the overall cash balance of a company;
Chapter VI – Financial Ratios Analysis – explores the ratios that help us understand the modifications of the most powerful tool of financial statement analysis.
However, each chapter is intended to stand alone so that casual users can refer to the section that is most appropriate to their problem.