Glossary: M01 Introduction to FSA

TermDefinition
Financial Statement Analysis (FSA)The process of examining a company’s financial statements to make economic decisions
Balance SheetStatement of financial position showing assets, liabilities, and equity at a point in time
Income StatementStatement reporting revenues, expenses, and net income over a period
Statement of Cash FlowsStatement reporting cash inflows and outflows classified as CFO, CFI, CFF
Statement of Changes in EquityStatement showing changes in each equity component over a period
Notes to Financial StatementsSupplementary information providing details on accounting policies, assumptions, and disaggregated data
Management Discussion and Analysis (MD&A)Management commentary on financial results, trends, and risks
Auditor’s ReportIndependent auditor’s opinion on whether financial statements are fairly presented
Unqualified OpinionClean audit opinion; financial statements are fairly presented in all material respects
Qualified OpinionFinancial statements are fairly presented except for a specific matter
Adverse OpinionFinancial statements are not fairly presented; material misstatements exist
Disclaimer of OpinionAuditor unable to form an opinion due to scope limitations
Proxy StatementDocument containing executive compensation, governance, and shareholder voting information
FSA FrameworkStructured approach: define purpose, collect data, process data, analyze/interpret, report conclusions
Annual ReportComprehensive yearly report including financial statements, MD&A, and auditor’s report
Interim ReportFinancial report covering a period shorter than one year (typically quarterly); usually unaudited