Méthodologie du cas d'entreprise (document en anglais)

1. Discuss the four main steps of a comprehensive business analysis with financial statements. As a financial analyst, explain why each of these steps is a critical part of your job and how they relate to each other.

• 1st part of the question

The four main steps of a comprehensive business analysis with financial statements:

-Business strategy analysis

This step simply consists in analyzing the business strategy of a firm when it comes to its profits. The goal here is to see how long a company can stay in business based on its potential profit. In fact, this analysis is done at a qualitative level. Moreover, this kind of business analysis helps predict the firm’s future performance.

-Accounting analysis

To analyze the performance of a firm, we only based on accounting information in the statement. Therefore, we need to make sure that the numbers used are unbiased and also that the statement are consistent regarding policies. That is why this step exists.

-Financial analysis

To ensure the sustainability of a business firm, this step is really important because it consists in using financial data to study the future of a firm based on its past and its present. We mostly have to use ratios but also cash flows’ interpretation in this step. Both help evaluate respectively the performance and the liquidity of the firm.

-Prospective analysis

This is the last step of this business analysis. It is the prediction of the firm’s future itself. We generally used two methods which are valuation and financial statement forecasting. This step makes a general conclusion of all the Suspicions generated through the 3 previous steps.

• 2nd part of the question

As a financial analyst, each of the previous steps is a critical part of my job since I have to study entirely the performance of a company to recommend or not a sale, a purchase, an investment somehow subjectively…

 -Business strategy analysis is really important for me because it helps me know as soon as possible if the firm could stay in business for a long period. So I need to pay attention not to fail in my conclusion.

 -Accounting analysis leads me to an unbiased estimate of the firm’s current book value and return on equity. It is a critical part because it will give an idea about the real value of the company but because I’m the one concluding, my judgment is required.

 -Financial analysis makes me understand the core of the current return on equity of a firm. It is a critical part of my job because since the figures cannot explain themselves, my role is to bring explanation, meaning, interpretation and finally a judgment.

 -Prospective analysis is like a conclusion of all the other parts. Because the others are critical parts and come from my judgment, this is also a critical aspect in my job.

• 3rd part of the question

First of all, to make an accounting analysis we necessarily need to take a look at the strategy of the business firm. This sight will give us an idea about the strengths

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