FINANCIAL STATEMENT ANALYSIS

Contents
▶ Introduction
▶ Need
▶ Tools for Financial Analysis
▶ Interested Parties
▶ Purpose

Introduction
▶ Financial statement analysis (or financial analysis) is
the process of reviewing and analyzing a company's
financial statements to make better economic
decisions.
▶ These statements include income statement, balance
sheet, cash flow statement , statement of changes in
equity.
▶ FSA asses the financial health & performance of the
company.
▶ FSA consist of comparisons for the company over the
period of time and comparisons of different companies
either in the same industry or in different industries.

Need for Financial Analysis
To Evaluate
➢Financial Performance
➢Financial Position
➢Prediction of Future Performance
➢Operating efficiency of firm

Tools for Financial
Analysis
▶ Comparative Statement
▶ Common size Statement
▶ Trend Analysis
▶ Ratio Analysis
▶ Funds flow Statement
▶ Cash flow Statement

Interested Parties
▶ Management
▶ Employees
▶ Creditors
▶ Lenders & Investors
▶ Shareholders
▶ Labor Unions
▶ Govt. Agencies

Purpose
To Evaluate
➢ Financial Performance
➢ Financial Position
➢ Prediction of Future Performance
➢ Operating efficiency of firm