Answers to Questions in Chapter 1 & 2 of Business Analysis & Valuation Using Financial Statements by Krishna, G. Palepu and Healy, Paul M.

Abstract

The authors of the book “Business Analysis and Valuation Using Financial Statements” are Krishna G. Palepu, PhD and Paul M. Healy, PhD, ACA. Both are subject matter experts in business administration and professors at Harvard University. These professors in addition to being forces to reckon with as far as business research is concerned, are part of various academic boards and are authors of numerous academic books. Financial statements provide various forms of business analysis. These analyses range from: monitoring and judging firms’ performance relative to competitors; providing insights on the financial policies to be used; financial reports to investors including evaluation of new business to be acquired. They can be used to rate and evaluate companies before they are recommended to clients by security analysts; valuation of prospective buy outs, mergers and acquisitions and also come in handy in the evaluation of the creditworthiness of customers before they are given loans by banks (Healy & Krishna, 2012).