Page 80 - FINAL CFA I SLIDES JUNE 2019 DAY 7
P. 80
Session Unit 7:
27. Financial Analysis Techniques
LOS 27.g: Describe how ratio analysis and other techniques can be used to model and
forecast earnings. P.166
• COGS % from a common-size income statement can be used in constructing a pro
forma income statement for the next period based on the estimate of sales.
• Three methods of examining the variability of financial outcomes around point
tanties
estimates are:
• sensitivity analysis (how one variable impacts earnings, all else the same)
• scenario analysis (how one variable in good, average, worse) can effect earnings)
• Simulation (how repeated variations in one variable in assuming normal distribution, affects earnings).
