Chapter 1 A Framework for Business Analysis and Valuation Using Financial Statements

Discussion
Questions
1. John, who
has just completed his first finance course, is unsure whether he should take a
course in business analysis and valuation using financial statements, since he
believes that financial analysis adds little value, given the efficiency of
capital markets. Explain to John when financial analysis can add value, even if
capital markets are efficient.

2. Accounting
statements rarely report financial performance without error. List three types
of errors that can arise in financial reporting.