An Understanding Of Financial Statement Analysis
Financial statement analysis is the process of examining the financial strengths and weaknesses of the company and other business organizations. Generally, it is done by establishing the accurate relationship between the variables of the balance sheets and the profit and loss of the businesses.
However, there are several techniques those are used for the financial statement analysis viz…
Basically, the purpose of preparing financial statements is to meet the external reporting obligations. It also assists in managerial decision making process. Nonetheless, the information collected and incorporated in the financial statements of particular business is not final in itself because merely on this basis no consequential conclusion can be drawn. But of course, the financial information provided in the statements is of great use in doing analysis and interpretation of financial statements.
Techniques and Methods of financial statement analysis
Some of the important techniques and methods of financial statement analysis are:
Benefits of financial statement analysis
There are following significant benefits of financial analysis:
So, financial statement analysis is very advantageous and efficient procedure that assists everyone including company, employees, and government authorities along with regulatory authorities.