Research Methods in Psychology

Financial Statement Analysis

• Comprehensive analysis of financial statements involves evaluating relationships among components for better understanding of financial position, profitability, and growth potential.
• Tools used for financial analysis include comparative statements and common-size statements.

Comparative Statements

• Comparing components or elements of balance sheets and income statements over multiple years facilitates trend analysis and reveals strengths and weaknesses.
• Intra-firm comparison analyzes a company's financial performance over time.
• Inter-firm comparison analyzes a company's financial performance against that of other firms in the same industry or with industry standards.

Common-Size Statements

• Financial statements' individual components are converted to percentages using a common base to make comparisons easier.
• For balance sheets, total assets or total liabilities are common bases.
• For income statements, revenue from operations (net sales) is the common base.
• Common-size statements reveal trends in financial position and performance.

Ratio Analysis

• Mathematical relationships between related accounting variables are calculated ratios, which provide valuable insights into a company's performance.
• Ratios can be used to evaluate financial position, solvency and profitability.
• Common financial ratios include liquidity ratios, solvency ratios, and profitability ratios.

Cash Flow Statement

• Demonstrates how cash moved in and out of the business during a specific period.
• Includes three main activities: operating, investing, and financing.
• Operating Activities involve day-to-day transactions.
• Investing Activities involve long-term assets.
• Financing Activities involve changes in the enterprise's capital structure.
• Cash Flow statements measure the actual cash inflows and outflows of a business.

Test your knowledge on essential research methods used in psychology. This quiz covers topics such as reliability, control groups, statistical tests, qualitative data collection, and hypothesis testing. Perfect for students studying research methodology.