Understanding Financial Statement Analysis for Better Decision Making
Understanding Financial Statement Analysis for Better Decision Making Financial statement analysis is the process of reviewing and analyzing a company's financial statements in order to make informed business decisions. By examining a company's income statement, balance sheet, and cash flow statement, analysts can gain valuable insights into the financial health and performance of the company. Here's what you need to know about financial statement analysis. Income Statement The income statement shows a company's revenue and expenses over a specific period of time. By analyzing the income statement, analysts can determine the company's profitability and identify any trends or patterns that may impact future performance. Key metrics to look for include gross profit margin, net profit margin, and earnings per share. Balance Sheet The balance sheet shows a company's assets, liabilities, and equity at a specific point in time. By analyzing the balance s