Financial statement analysis
CONCEPT OF FINANCIAL STATEMENTS
Financial statements represent a summary of the financial information prepared in therequired manner for the purpose of use by manger and external stake holders. Financialreports are prepared basically to communicate to external holders about the financial positionof the company. Financial statement analysis is useful both help anticipate future positionand, more important.In the words of Hampton “A financial statement is an organize collection of data organizedaccording to logical and accounting procedure “According to howard and upton “ Although my own financial statement expressed in moneyvalue might be though of as financial statements, the term has come to be limited by mostaccounting and business writers to mean the ‘ balance sheet and profit and loss account’.
Meaning and concept
Financial statement represent a summary of the financial information preparein the required manner for the purpose of use by managers and external stakeholders.Financial reports are prepared basically to communicate to the external shareholdersabout financial position of the company that they own. Financial statement analysis isuseful both to help anticipate future condition and, more important, as a starting pointfor planning action that will improve the firm’s future performance. Financialstatement analysis generally begins with a set of financial ratios designed to reveal acompany’s strengths and weaknesses as compared with other companies in the same