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.

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Buying cheap stocks in large volume cannot guarantee huge profits,as many day trading beginners think that by buying large volumes of a cheap stock they will be able to make huge profits.Newbie’s start calculating future large profits in their mind due to the large share size that can be purchased due to the stock being of low price.

Things might work when you mix a bit of investors strategy to day trading.Like in 2008-09 recession many investors made their fortunes by purchasing stocks at low prices.But if market is on the peak then i think turining on to cheap shares that no body is picking is just a gamble.First, these shares are not Investments for a longer period. The market is usually more efficient, so you can be sure that they are at correct price. Second, they tend not to follow technical data pattern. In the same way that a certain hierarchy to find patterns in terms of deadlines, where the graph
a model of each subsequent longer period is more powerful than the previous shorter time gives weakness is a built-in patterns on a very cheap stock.

Think better,use stop loss and clear your thoughts before trading.I would suggest to book profit whenever you are in to.Not all the cheap stocks are bad,some new IPO’s might be interesting when they have lots of potential but listed when market is down or any news that creates havoc among investors while the share looks firm on fundamental grounds.Such chances can be taken but you have to be very careful and please keep detailed records of your transactions including profit and loss analysis, taxes and much more. This will give you a hint whether this day trading game suits you or not.

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