Financial statement Analysis

Financial statement analysis is the process of examining a company's financial statements to assess its financial health performance and trends. The analysis typically involves reviewing the balance sheet income statement and cash flow statement. Key techniques include:Ratio Analysis: Uses ratios like profitability (e.g. net profit margin) liquidity (e.g. current ratio) leverage (e.g. debt-to-equity) and efficiency (e.g. asset turnover) to evaluate financial performance.Trend Analysis: Examines data over time to identify patterns and predict future performance.Comparative Analysis: Compares financials to industry benchmarks or competitors to understand relative performance.Financial statement analysis helps stakeholders including investors managers and creditors make informed decisions about investments operations and lending.