Online Discussion for Accounting class Essay Example | Topics and Well Written Essays - 250 words

Online Discussion for Accounting class - Essay Example The financial performance of a company can be analyzed either using single date statements or by comparing the performance across time. The four financial statements are the income statement, balance sheet, statement of retained earnings, and statement of cash flow (Weygandt, Kieso, Kimmel, 2002). These statements provide a summary of the financial performance of a company during a financial period. The balance sheet shows the position of the company at a specific point in time. The use of ratio analysis is one of the best ways to evaluate the performance of a company during a period. Another methodology to assess the performance of a company is by using comparative statements. Two financial techniques that can be used to compare financial statements are vertical and horizontal analysis. I think that techniques that compare performance across time are more effective because they show trends in financial performance. Companies that have rising performance across time are more desirabl e than firms that have declining