Predicting and Evaluating a Firm 's Performance

This chapter reviews the statements given in annual reports and their evaluation techniques to develop and identify a firm's goals and constraints. Tactical and operational goals are mentioned in specific statements and in discussion with the respective heads of operational wings. In order to predict and evaluate a firm's performance, an in-depth analysis is required of the following statements: the chairman's statement, the director's statement, the CFO's statement, the balance sheet, the income statement, the cash flow statement, the funds flow statement, and information on significant accounting policies with notes to accounts. The first three are forward-looking statements provided by the top decision makers of the firm. The four financial statements-income, balance sheet, cash flow, and funds flow statements-identify the financial strengths and weaknesses of the firm.