Financial Statement Analysis- By Ratio Analysis Method
Meaning of Financial Statement Analysis Financial Statement analysis is the process of analyzing financial statements of a company so as to obtain meaningful information about its survival, stability, profitability, solvency, and growth prospect.The financial statement analysis can be performed by using a number of techniques such as Horizontal (Comparative Statements) analysis, Vertical (Common Size Statements) analysis, Trend Analysis. and Ratio analysis . Ratio analysis is the most popularly and widely used technique of financial statement analysis. Ratio analysis is a widely used tools of financial analysis. The systematic use of ratio helps to interpret the financial statements so that the strength and weakness of a firm can be determined and assessed. The ratios describe the significant relationship that exits between figures shown on a balance sheet and income statement or any part of a financial statement. List of Financial Ratios Liquidity Ratios Current or Working Capi