Learning Objectives

After reading this chapter, you should be able to:

• Define accounting and describe the different uses of accounting information.

• Demonstrate the accounting process.

• Decipher the various components of an income statement in order to evaluate a firm's "bottom line."

• Interpret a company's balance sheet to determine its current financial position.

• Analyze financial statements, using ratio analysis, to evaluate a company's performance.

• Assess a company's financial position using its accounting statements and ratio analysis.