CFA Level I · CFA Level I Exam · Financial Analysis Techniques
An analyst is performing a financial analysis of a company. Which step in the financial statement analysis framework most likely comes immediately after collecting input data?
Processing the data and analyzing the results comes immediately after collecting input data. The analyst must first adjust and transform the data, for example by computing ratios and common-size statements, before interpreting it, communicating conclusions and following up later.
- ADeveloping and communicating conclusions
- BProcessing data and analyzing the resultsCorrect
- CFollowing up with updated analysis
Explanation
The framework runs: articulate the purpose and context, collect input data, process the data, analyze and interpret the results, develop and communicate conclusions, then follow up. Processing data (adjusting statements, computing ratios, building common-size statements) follows data collection. Communicating conclusions and follow-up come later.
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