5.

Financial Statement Analysis

Financial statement analysis involves examining a company's financial statements to

make informed business decisions. It's a fundamental practice in corporate finance and
accounting, providing insights into a company's performance, liquidity, solvency, and
profitability.

There are three main financial statements: the balance sheet, which provides a snapshot
of a company's financial position at a particular point in time; the income statement,
which shows the company's revenues and expenses over a specific period; and the cash
flow statement, which outlines the inflows and outflows of cash.

Analysts use various tools and ratios to analyze these statements. These include liquidity
ratios (like current ratio and quick ratio), profitability ratios (like gross profit margin and
return on assets), and solvency ratios (like debt to equity ratio).