Financial Statement Analysis What is 'Financial Statement Analysis'? Reviewing and evaluating a company's financial statements such as the balance sheet or profit and loss statement is Known as Financial statement analysis. It helps the user of the financial statements in gaining an understanding of the financial health of the company and enabling more effective decision making. All the financial data are recorded and summarized in the financial statement. This record and information must be analyzed and evaluated through the process of financial statement analysis so that it becomes more useful to investors, shareholders, managers, and other interested parties. DIGGING DOWN 'Financial Statement Analysis' Financial statement analysis is an analytical process of determining the past, current and projected performance of a business entity. Several techniques are generally used as part of financial statement analysis. Some of them are horizo...