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What is the purpose of financial statement analysis?

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What is the purpose of financial statement analysis? What are some of the tools that we can use to analyze financial performance? What should we use to benchmark our performance? Why? What are the different types of financial ratios used to analyze financial performance? Are some ratios more important than others? Why? Which ratios are important to creditors? Which to investors? Which to managers? Why?

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This solution describes the purpose and tools for financial statement analysis in 542 words.

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What is the purpose of financial statement analysis? What are some of the tools that we can use to analyze financial performance? What should we use to benchmark our performance? Why? What are the different types of financial ratios used to analyze financial performance? Are some ratios more important than others? Why? Which ratios are important to creditors? Which to investors? Which to managers? Why?

The purpose of the financial statement financial analysis is to provide relevant information to all the stakeholders of the organization which will help in their decision making. This also helps in comparing the performance of the organization and used in the control of the organization. Some of the tools that can be used to analyze the financial performance are:
1) Ratio analysis
2) Common size statements
3) Percentage change in financial statements

Some of the things which can be used to benchmark the financial performance are:
1) Comparing the performance with the previous years
2) Comparing the performance with the ...

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