Brief Exercise 15-1 (BE15-1) You recently received a letter from your Uncle Frank. A portion of the letter is presented below.
You know that I have a significant amount of money I saved over the
years. I am thinking about starting an investment program. I want to do
the investing myself, based on my own research and analysis of financial
statements. I know that you are studying accounting, so I have a couple
of questions for you. I have heard that different users of financial
statements are interested in different characteristics of companies. Is
this true, and, if so, why? Also, some of my friends, who are already
investing, have told me that comparisons involving a company’s financial
data can be made on a number of different bases. Can you explain these
bases to me?
Instructions: Write a letter to your Uncle Frank which answers his questions.
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