What Is Financial statement analysis?

Financial statement analysis is the process of reviewing and analyzing a company’s financial statements to make better economic decisions. These statements include the income statement, balance sheet, statement of cash flows, and a statement of changes in equity.

Financial statement analysis involves specific techniques for evaluating risks, performance, financial health, and future prospects of an organization

Thus, financial statement analysis is:

➢useful to investors,

➢useful to shareholders and

➢useful to managers, and other interested parties For a better understanding of organization financial position.

Objectives of Financial Statement Analysis

❖Assessment of past performance and current position

❖Prediction of Net Income or Net loss

❖Prediction future growth prospects

❖Prediction of Bankruptcy and Failure

❖Enhance for proper decision making

Financial Statement Analysis for Commercial Bank

1. Balance Sheet

2. Profit and Loss Account

3. Profit and Loss Appropriation Account

4. Statement of Changes in Equity

5. Statement of Cash Flow Ratio Analysis

READ MORE;

What is Financial Management? Financial System, Its types

What Is Cash Management, & How Can It Benefit To Business?

What is Liquidity Management In Bank? why it’s important?

What Is Asset Liability Management (ALM) In Bank?

Leave a Reply