Why Financial Statements Analysis?
Financial statements are a firm’s or any business’s report card. They summarize the performance of the firm over a specified prior period mainly using quantitative metrics, supplemented by qualitative reporting. Just as a child gets her report card at the end of a term or year, a firm produces its report card for the benefit of those who have a stake in its performance and future. Just as a child’s report card becomes a useless piece of document unless the parent analyzes the information to understand what has gone right and wrong during the year and what steps can be taken to rectify mistakes and improve performance, financial statements of a firm can become meaningless documents unless the management ...
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