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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...

Financial Statement Forecasting Financial Statement Forecasting The financial statement forecasting begins with  the forecasting of the future estimates that are made through preparation of statement like projected income statement, projected balance sheet, projected cash flow and fund flow statements, cash budget, preparation of projected financial statements with the help of ratios etc. Financial statement forecasting is useful in making various financial decisions like capital investment, annual production level, operational efficiency required, requirement of working capital, assessment of cash flow, raising of long term funds, estimation of funds requirement of business, estimated growth in sales etc. When we forecast the financial statement we forecast the Profit and Loss and Cash Flows. From these financial statements, we get the forecasted Balance Sheet. When we prepare the Profit and Loss, we start from the sales figures. For forecasting the sales figure...