CFA Level I · CFA Level I Exam · Introduction to Financial Statement Analysis
The primary objective of financial statement analysis is most likely to:
The primary objective is to evaluate a company's performance and financial position using its financial reports so that users can make informed economic decisions, such as investing or lending. It is not auditing or setting accounting policy, which are done by auditors and standard setters.
- Aaudit the financial statements for compliance
- Bevaluate a company's performance and financial position to support economic decisionsCorrect
- Cset the accounting policies a company must follow
Explanation
Financial statement analysis uses reported information to evaluate a company's past performance and current financial position and to project future results, so that investors and creditors can make decisions. Auditing is performed by independent auditors, and accounting policy is set by standard setters and management.
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