How can fi nancial statement analysis be used to evaluate the credit quality of a potentialfi xed-income investment?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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How can fi nancial statement analysis be used to evaluate the credit quality of a potential
fi xed-income investment?

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Step 1: INTRODUCTION

Whenever, an investor is considering an investment proposal, he need to analyze the various things which impact the risk and return of that investment. Financial statement plays an important role in that. By analyzing financial statement, an investor can get various insight about the firm, which will help in decision making.

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