The process of examining a company's financial statements in order to make decisions is known as financial statement analysis.
It is used by external stakeholders to assess an organization's general health as well as its financial performance and market worth. It serves as a monitoring tool for handling funds for internal stakeholders.
Based on its own historical performance and the relationships between its financial items, the firm under investigation can offer criteria for comparisons.
There are the five techniques for analyzing financial statements.
Cost volume profit analysis
Ratio analysis
Trend analysis
Horizontal and vertical analysis, and other types of analysis.
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