Fundamental Analysis Methods
Financial analysis or accounts analysis is the method that various investors and professionals adopt to assess the stability,profitability and health of business.
It helps them to know whether or not the financial position and progress of the company are satisfactory or unsatisfactory.The basic objective of analytical method is to make things more simplified and brief that can be reviewed in less time.The financial analysis is concerned with the extraction and processing of specific information about s financial instruments , financial markets and companies .
There are different methods that are adopted by professionals to to ascertain or measure the relationships among the financial statements items of a single set of statements.
Analytical methods used in analysing financial statements are as follows:
1. Comparative Statements
2. Common Size Statements
3. Trend Ratios I
4. Ratio Analysis Q
5. Cash Flow Statements.
In upcoming posts we will be discussing important ratios,their usage,analytical methods pointed above along with some software’s that can help you in your calculations.