Financial Statement Analysis

Financial statement analysis is the process of analyzing a

company's financial statements for decision-making purposes. External
stakeholders use it to understand the overall health of an organization as well
as to evaluate financial performance and business value. Internal
constituents use it as a monitoring tool for managing the finances.

*notes

*notes: the purpose of the FS analysis is to assess the financial health and performance of
the company, and to provide a company's financial profile for our users.

*notes: Intracompany Basis - this involves the analysis of different groups within

one organization.

Intercompany Basis - this involves the analysis of trends among groups in two or more
companies.

Industry Averages - this involves the analysis of trends across an entire industry.
*note: these are called
individual organizational
factors.

*note: this is an industry

factor
 *notes: kailangan maging aware tayo sa mga to kasi ito yung magiging basis natin dito
tayo kukuha ng mga information for our analysis and also we should select the right data analysis
method or tool for our financial statement analysis.

*note

Advantage:

Financial statement analysis evaluates a company’s performance or value

through a company’s financial statements. By doing this investors may
develop a more distinct picture of a company’s financial profile.

*note:

What Is an Example of Financial Statement Analysis?

An analyst may first look at a number of ratios on a company’s income statement to determine
how efficiently it generates profits and shareholder value. For instance, gross profit margin will
show the difference between revenues and the cost of goods sold. If the company has a higher
gross profit margin than its competitors, this may indicate a positive sign for the company. At
the same time, the analyst may observe that the gross profit margin has been increasing over
nine fiscal periods, applying a horizontal analysis to the company operating trends.
Trend Analysis

*note: Trend is a general direction and tendency