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.