Managerial Accounting

Managerial Accounting

Q. Comment on the various ways that financial statement information is presented in this article on Nokia.

The financial information was presented in the form of trend analysis of Nokia and its competitors. Moreover, graphs were also used to represent the financial comparison of Nokia with other companies.

Trend analysis is important in the business and financial sectors. Trend analysis is often used to make projections and assessments of financial health. Financial analysts examine the past performance of their company, along with current financial conditions, to determine how their company will perform in the future. Normal trend analysis for most companies is based on the total dollar basis that most use for financial reporting (Thomas, Tsay and Olds, 2009).

Total Dollar Basis

The total dollar basis in financial reporting is a fairly straightforward way for companies to provide investors and financial analysts with a snapshot of their financial health. Using the total dollar basis in financial analysis means that analysts make determinations about financial health and forecasts about the future based on the value and earnings of a company using real-world dollars, rather than other methods such as earnings per share, which is a hypothetical calculation.

Variation

Although the total dollar basis is the primary means for reporting and analysis, it's not the only one used in most cases. The more hypothetical earnings per share is also used as an additional tool, as are other methods of analysis. The percentage of change on a quarterly or yearly basis is often used as one way to project potential growth, as is placing a company within the larger context of the specific market or industry in which it's found. In this latter case, the entire market is also analyzed to discern trends and where the analyst's company fits within those trends (Gulerianr, 2007).

Q. Does the article ...