Can somebody please give me an idea what is analyzing financial statement is?

Question

i really need it badly>...

how to do it?

Answer 1

By analysing financial statements of an entity, we come to know broadly about the financial strength of that entity. With applying more and more tools/methods further, we get specific factual positions on capital, net worth, profitability, creditors, receivables, investments, assets -fixed and floating, funds position - liquid and fixed, financial ratios - debt/equity, return on investments, debtor-creditors ratios........as we go on and whatever we need to know.

We derive these analytical information based on internationally set formulae and accounting practises. These tools / methods / formulae are available in any good financial analysis and management books available in business books stores.

Answer 2

To analyze is to examine something.....so to analyze a financial statement would be to go over it to make sure everything is correct and balanced. That all the information is right. When i get my bank statement at the end of the month, I must check it to make sure I have the money in the bank they say I do on the bank statement. This bank statement is a financial statement. I hope this helps and does not confuse you....