What is financial statement analysis?
Financial statement analysis is a process of assessing a company's financial health by examining its financial statements. This involves interpreting data from income statements, balance sheets, and cash flow statements to identify trends, strengths, weaknesses, and potential risks.
Key techniques include:
Ratio Analysis: Calculating financial ratios to evaluate liquidity, profitability, and solvency.
Trend Analysis: Comparing financial data over time to identify patterns and changes.
Comparative Analysis: Comparing a company's financial performance to industry benchmarks or competitors.
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