Analysis of finanacial statemnts- detailed thoeratical report (2500 words)

May 2016 | 10 pages | ID: AFF087B03DDEN
Sadia Saeed

Abstracts

Introduction: Financial statement analysis or evaluation is the procedure of reviewing and evaluating corporation’s financial statements in order to make best economic decisions in the persisting situation. These statements are balance sheets, statement of cash flow, income statement and a statement of retained income. The procedure of analyzing and reviewing the financial statements of the corporation by deeply evaluating the financial scenario of the corporation and involve it in decision making is the main purpose of the financial statement analysis. Decision making by different entities that are directly or indirectly involved with the company is mainly depend on the financial analysis of the company as make them familiar with the financial conditions of the business that assist them a lot in their decisions. Financial statements make records of the monetary information and this data should be analyzed by financial statement analysis to make it more beneficial to shareholders, management, creditors and other concerned groups. Financial statement analysis is an analytical tool of determining the present, past and future performance of a corporation (Investopedia, 2013).

Contents

Introduction
Importance of financial statement analysis for different groups
Steps involved in Financial Statement Analysis
Statements Involved in Financial Statement Analysis
Types of analysis
Actual vs. Planned Performance
Trend Analysis
Ratio Analysis
Balance Sheet Ratios
P&L Ratios
Management Ratios
Problems with Financial Statement Analysis
Conclusion
References