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Information About

Financial Analysis





GOALS


Such an analysis has the objective to assess the firm's:

  • solvency, so as for a bank or a supplier to grant a Credit ,




METHODS


Financial analysts, among other tasks, use to compare ''' Financial Ratios ''' (of solvency, profitability, growth...)
  • between several periods (the last 5 years for example)

  • and between similar firms.


Those ratios are calculated by dividing a (group of) account balance(s), taken from the Balance Sheet and / or the Income Statement , by another, for example :

:''Net profit / equity = return on equity

:'' Gross Profit / balance sheet total = return on assets

:''Stock price / earnings per share = P/E-ratio


SEE ALSO



Ratios