From my summary below, would you agree or disagree in regards to describing and critiquing how financial statement analysis could be used for that organization? And why?

Financial statement analysis is useful in many ways, including drawing attention to changes over time and initiating inquiries into these changes to better understand the financial standing of an organization. This type of analysis is referred to as horizontal analysis. It uses a minimum of two years worth of financial statements and compares the dollar amounts in relevant accounts across those years. These differences are often expressed as percentages in order to be more informative (Davis & Davis, 2020). I work for GCU while I am not in accounting or finance, I am aware of how sensitive the financial stability of non-profit universities can be and how sensitive people are to financial decisions made in higher education. After the chaos of the COVID-19 pandemic, horizontal analysis in higher education is essential to see where and how finances have been affected. Furthermore, investigations are needed in to why the finances have changed- is it due to the affects of the pandemic or something else? It is important not to assume decreases or difficulties were all due to the pandemic and time will correct them. We could also use a vertical analysis, or common-size analysis, which is an analysis of changes in the relative account balances in a single financial statement. A common-size financial analysis shows items on each statement as a percentage of a common base figure. If the percentage is higher or lower than expected, investigation is necessary. Performing common-size analysis across several years can help determine financial strength. Finally, common-size financial analysis can be used to compare a company to its competitors (Davis & Davis, 2020). This type of analysis could further our understanding of GCU's financial strength and stability. One of GCU's points of pride is not raising on-campus undergraduate tuition in several years. GCU needs to be financial stable in order to continue this work. GCU should also be aware of how they measure up to competitors financially in order to stay competitive.