Accou ti g A ig e t
A aly i of co pa y u i g tool
of fi a cial tate e t a aly i
SUBMITTED TO
Prof. Shweta Tiwari
Fi a cial State e t
A aly i : A Co pre e ive
Guide
This presentation explores the use of financial statement analysis
tools to gain valuable insights into a company's performance and
financial health.
A alyzi g Co pa y Perfor a ce
U der ta di g Co pa y Fi a cial I for ed Deci io -Maki g
Financial statement analysis enables us to evaluate a It provides valuable information for investors, creditors,
company's past performance, current position, and and management to make sound financial decisions.
future prospects.
I troductio to Fi a cial
State e t A aly i
1 Key Co cept 2 A alytical Tec ique
Financial statement Various tools and
analysis involves reviewing techniques are employed,
and interpreting a including ratio analysis,
company's financial trend analysis, and
statements to assess its common-size analysis.
financial health and
performance.
3 Data-Drive I ig t
These techniques help uncover valuable insights into a
company's profitability, liquidity, solvency, and efficiency.
Purpo e a d Objective of Fi a cial State e t
A aly i
A e Perfor a ce Foreca t Future Pro pect
Evaluate a company's past performance and identify Predict future financial performance and assess the
trends in its financial health. company's potential for growth and profitability.
Make I for ed Deci io Ide tify Ri k a d Opportu itie
Provide valuable information for investors, creditors, Uncover potential risks and opportunities, such as
and management to make sound financial decisions. financial distress or competitive advantage.
Key Fi a cial State e t
Bala ce S eet I co e State e t
A snapshot of a company's Summarizes a company's
assets, liabilities, and equity at a revenues, expenses, and net
specific point in time. income over a period of time.
Ca Flow State e t
Tracks a company's cash inflows
and outflows over a period of
time, providing insights into its
liquidity and financial health.
Horizo tal A aly i :
Exa i i g Tre d
1 Year-Over-Year Co pari o
Analyzing changes in financial statement items over
time, such as revenues, expenses, and assets.
2 Ide tifyi g Tre d
Revealing growth patterns, declines, or periods of
stability, helping to assess a company's performance.
3 U der ta di g Driver
Investigating the factors driving these trends, such as
new product launches, cost reductions, or economic
conditions.
Vertical A aly i : Evaluati g Proportio
Co o -Size A aly i
Expressing financial statement items as a percentage of a base amount,
1
such as total assets or total revenue.
Co pari o a d Be c arki g
2 Facilitates comparison between different companies or periods
within a single company.
U der ta di g Relatio ip
3 Revealing the relative importance of various financial
components and highlighting key relationships.
Ratio A aly i : Mea uri g Fi a cial Perfor a ce
Liquidity Ratio
1
Assess a company's ability to meet its short-term obligations.
Profitability Ratio
2
Measure a company's ability to generate profits from its operations.
Solve cy Ratio
3
Evaluate a company's ability to meet its long-term debt obligations.
Activity Ratio
4 Assess a company's efficiency in managing its assets
and operations.
I terpreti g Re ult :
Ide tifyi g Stre gt ,
Weak e e , a d
Opportu itie
1 2
Stre gt Weak e e
Highlighting areas where the Identifying areas that require
company excels, such as strong improvement, such as low
profitability or efficient liquidity or high debt levels.
operations.
3
Opportu itie
Recognizing potential areas for
growth and improvement, such
as expanding into new markets or
launching new products.
I tegrati g Qualitative Factor a d Exter al
Co ideratio
THANK YOU
