Critical Thinking about Your Financial Analysis
This is not a comprehensive outline of your critical thinking when interpreting your analysis, rather
is a starting point to assist you in thinking about the results of your analysis..
Questions to be addressed in the So What? Where to find answer?
Can the company pay its bills? Balance Sheet, Cash Flow
Statement
Does the company have the capacity to raise
capital?
Balance Sheet
Do the financials provide a competitive
advantage? How?
What are the implications of the financials for
future strategy and for the execution of
strategy?
How does the company perform compared to
its competitors?
What is increasing – revenue, debt, costs, etc.?
What is decreasing? What are the implications?
Is the company in a healthy or unhealthy
position? Implications?
What are the spreads – revenue/costs,
revenue/EBIT, revenue/debt?
Metrics related to KSFs
Metrics related to identified
future strategies
Comparative Analysis
Longitudinal
Income Statement, Balance
Sheet, Cash Flow Statement
In respective ratios
Outstanding trends in data? Longitudinal