xxii Contents 13 Analyzing and Interpreting Financial Statements 490 Basics of Analysis 491 Purpose of Analysis 491 Building Blocks of Analysis 491 Information for Analysis 492 Standards for Comparisons 492 Tools of Analysis 492 Horizontal Analysis 492 Comparative Statements 492 Trend Analysis 495 Vertical Analysis 496 Common Size Statements 496 Common Size Graphics 498 Ratio Analysis 500 Liquidity and Efficiency 500 Solvency 502 Profitability 503 Design Element Danil Melekhin Getty Images Market Prospects 504 Summary of Ratios 505 Decision AnalysisAnalysis Reporting 506 Appendix 13A Sustainable Income 509 Appendix A Appendix B Appendix C Financial Statement Information A Apple A 1 Google A 9 Samsung A 13 Applying Present and Future Values B1 Investments C1 Index IND Chart of Accounts CA Brief Review Financial Reports and Tables BR Selected Transactions and Relations BR 1 Fundamentals and Analyses BR 2xxii Contents 13 Analyzing and Interpreting Financial Statements 490 Basics of Analysis 491 Purpose of Analysis 491 Building Blocks of Analysis 491 Information for Analysis 492 Standards for Comparisons 492 Tools of Analysis 492 Horizontal Analysis 492 Comparative Statements 492 Trend Analysis 495 Vertical Analysis 496 Common Size Statements 496 Common ...Size Graphics 498 Ratio Analysis 500 Liquidity and Efficiency 500 Solvency 502 Profitability 503 Design Element Danil Melekhin Getty Images Market Prospects 504 Summary of Ratios 505 Decision AnalysisAnalysis Reporting 506 Appendix 13A Sustainable Income 509 Appendix A Appendix B Appendix C Financial Statement Information A Apple A 1 Google A 9 Samsung A 13 Applying Present and Future Values B1 Investments C1 Index IND Chart of Accounts CA Brief Review Financial Reports and Tables BR Selected Transactions and Relations BR 1 Fundamentals and Analyses BR 2