Question

explain method of financial statements​

Answer 1

Answer:

There are several techniques used by analysts to develop a fair understanding of a company's financial performance over a period. The three most commonly practised methods of financial analysis are – horizontal analysis, vertical analysis, and ratio and trend analysis

Answer 2

What Is Financial Statement

Financial statement analysis is the process of analyzing a company's financial statements for decision-making purposes. External stakeholders use it to understand the overall health of an organization as well as to evaluate financial performance and business value. Internal constituents use it as a monitoring tool for managing the finances.

KEY TAKEAWAYS

Financial statement analysis is used by internal and external stakeholders to evaluate business performance and value.

Financial accounting calls for all companies to create a balance sheet, income statement, and cash flow statement which form the basis for financial statement analysis.

Horizontal, vertical, and ratio analysis are three techniques analysts use when analyzing financial statements.