For example, equity investors are interested in the long-term earnings power of the organization and perhaps the sustainability and growth of dividend payments.
Creditors want to ensure the interest and principal is paid on the organizations debt securities (e.g., bonds) when due.
[4] Horizontal analysis compares financial information over time, typically from past quarters or years.
This, together with its rate of profit growth, relative to the amount of capital deployed and various other financial ratios, forms an important part of their analysis of the value of the company.
Analysts may modify ("recast") the financial statements by adjusting the underlying assumptions to aid in this computation.
[11] Financial analysts typically have finance and accounting education at the undergraduate or graduate level.
Persons may earn the Chartered Financial Analyst (CFA) designation through a series of challenging examinations.
Upon completion of the three-part exam, CFAs are considered experts in areas like fundamentals of investing, the valuation of assets, portfolio management, and wealth planning.