Question 1

FINANCIAL STATEMENT ANALYSIS SUBJECT

In February 19, in year 2020, marked the stock market peak before the outbreak of the COVID-19 pandemic triggered a freefall in share prices. In the year since, the world has changed, transforming our lives, our economies, and the fortunes of our businesses, an unfolding journey that is reflected in the ups and downs of share prices. The fundamental trends have accelerated, propelling some companies forward at record speed while for other headwinds have turned into hurricanes (McKinsey & Company, February 2021). Hence, with your own words and understanding, discuss THREE (3) challenges of using financial statement analysis in evaluating company performance during this period.

(15 Marks)