The Typical First Step in Financial Statement Analysis and Valuation

Multiple Choice

The typical first step in financial statement analysis and valuation (after selecting assumptions) is:

A) Understand the Purpose and Content of the Principal Financial Statements and Related Notes.
B) Identify the Industry Economic Characteristics and Firm's Strategy.
C) Calculate and Interpret Profitability and Risk Ratios.
D) Prepare Pro Forma, or Projected, Financial Statements.
E) Value the Firm.