CFA Level I · CFA Level I Exam · Introduction to Financial Statement Analysis
Which source is most likely to give an analyst information about a company's risks, strategy and management's discussion of results beyond the financial statements themselves?
Management commentary is the best source. It gives management's discussion of strategy, risks, resources and results, supplementing the quantitative primary statements. The statement of financial position and the statement of changes in equity present numbers and do not offer narrative on strategy or risk.
- AManagement commentaryCorrect
- BThe statement of changes in equity
- CThe statement of financial position
Explanation
Management commentary (MD&A) discusses strategy, risks, resources and performance, and so complements the numbers. The statement of financial position and changes in equity are primary statements that present figures, not narrative discussion.
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