Financial analysis is the process of evaluating the financial health and performance of a business, project, or investment. It involves assessing various financial statements, ratios, and other metrics to gain insights into the entity's profitability, liquidity, solvency, and overall financial stability.
Financial Statements
- Income Statement: Provides a summary of revenue, expenses, and profits over a specific period.
- Balance Sheet: Presents the assets, liabilities, and equity of a business at a specific point in time.
- Cash Flow Statement: Details the inflow and outflow of cash over a period, categorizing operating, investing, and financing activities.