Financial Statements Analysis

Financial statements analysis involves examining a company’s financial documents—such as the balance sheet, income statement, and cash flow statement—to understand its performance and financial health. This process helps stakeholders, like investors and management, evaluate profitability, liquidity, and stability. By comparing financial metrics over time or against industry benchmarks, analysts can identify trends, strengths, and weaknesses. This informed assessment guides decision-making, helping to determine investment viability, operational efficiency, and strategic planning. In essence, it is a critical tool for making informed economic decisions.