Financial Analysis

Financial analysis is the process of evaluating a company's financial performance and stability by examining its financial statements, such as the balance sheet, income statement, and cash flow statement. This analysis is used to assess the organization's financial health, profitability, liquidity, efficiency, and solvency. Analysts may use various financial ratios and metrics derived from these statements to make informed decisions regarding investment, creditworthiness, and performance improvement. Financial analysis can be applied to individuals, businesses, or entire economies, helping stakeholders understand how resources are being utilized and identify trends over time. It is a key component in strategic planning, investment analysis, and risk management.