Which of the following parties would perform an external financial analysis?

Which of the following parties would perform an external financial analysis?

A) A firm's compensation committee

B) A financial analyst forecasting the next period's borrowing needs

C) A firm's creditors

D) A CFO comparing the performance of the firm's various divisions

Which of the following parties would perform an internal financial analysis?

A) A financial analyst forecasting the next period's borrowing needs

B) A firm's competitors

C) A firm's creditors

D) Analysts for investment companies

Which of the following parties would be interested in an analysis of the firm's financial statements?

A) Investors

B) Creditors

C) The firm's managers

D) all of the above

The analysis of a firm's financial statements can be an important factor in the firm's ability to borrow money.

Answer:  TRUE

The analysis of a firm's financial statements is usually of interest only to people who do not work for the company.

Answer:  FALSE

Individuals who do not work for a company rarely have enough information to perform a detailed financial analysis of the company.

Answer:  FALSE