Judith, an accounting major, states, “Strategy analysis seems to be an unnecessary detour in doing financial statement analysis. Why can’t we just get straight to the accounting issues?” Explain to Judith why she might be wrong.
Answer to relevant QuestionsWhat are the critical drivers of industry profitability? All major airlines offer frequent flier programs. Originally seen as a way to differentiate their providers in response to excess capacity in the industry, these programs have long since become ubiquitous. Many industry ...Bill Simon says, “We should get rid of the FASB and SEC since free market forces will make sure that companies report reliable information.” Do you agree? Why or why not?U.S.-based American International Group Inc. (AIG) is one of the world’s largest insurance companies, offering property-casualty, life insurance, and retirement services to customers in more than 130 countries. In its ...James Broker, an analyst with an established brokerage firm, comments: “The critical number I look at for any company is operating cash flow. If cash flows are less than earnings, I consider a company to be a poor ...
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