Introduction to Financial Analysis

The evaluation of financial data in order to make business decisions is known as financial analysis. The financial accounts of a company are the main source of data for financial analysis. These records are used by the financial analyst to calculate ratios, draw trend lines, and make comparisons to data from comparable companies.

One of the most important tools business managers use to assess how their organization is doing is financial analysis. They frequently ask the financial analyst about their company's profitability, cash flows, and other financial matters as a result.



Ratio Analysis: The quantitative interpretation of a company's financial performance is done through ratio analysis.
Financial Statement: Financial statements, which are often referred to as financial reports, are official records of the financial activity and condition of a company, individual, or other entity.
Common Size Statement: This method examines financial accounts by calculating each line item as a percentage of the base amount for that accounting period.
Benchmarking: Benchmarking is the practice of comparing the performance of a company's products, services, or processes to the best in the marketplace.


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