This module presents an overview of the financial statements of commercial firms. Students first read chapter 1 of Understanding Financial Statements, ninth edition, by Lyn M. Fraser and Aileen Ormiston, then view the on-line presentation. Topics covered include: why and when financial analysis is necessary in marking credit decisions; the nature of the trade creditor’s claim relative to that of other financial stakeholders; types of financial statements; liability issues and their effect on financial reporting; and limitations in using accounting data. There is no problem assignment for this module.
Dr. Frederick C. Scherr is a Professor Emeritus of Finance at the College of Business and Economics at West Virginia University, where he taught for 30 years and won both the College’s Outstanding Teacher and Outstanding Researcher awards. He is the author of more than 30 research articles, four textbooks, and many articles in professional publications such as The Credit and Financial Management Review, The Credit Manager, and Business Credit. He has done extensive work in adult education for the National Association of Credit Management, including teaching at the Graduate School of Credit and Financial Management, and for private corporations.