Question

who requires interpretation of financial statement ? explain.​

Answer 1

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Interpretation of financial statements involves many processes like arrangement, analysis, establishing relationship between available facts and drawing conclusions on that basis.

General Public Anyone in the general public, like students, analysts and researchers, may be interested in using a company’s financial statement analysis. They may wish to evaluate the effects of the firm on the environment, or the economy or even the local community.

Answer 2

Answer:

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Explanation:

Introduction to Analysis and Interpretation of Financial Statements 2. Types of Financial Analysis 3. Preliminaries Required 4. Objectives 5. Importance 6. Techniques.

Introduction to Analysis and Interpretation of Financial Statements:

Analysis and interpretation of financial statements are an attempt to determine the significance and meaning of the financial statement data so that a forecast may be made of the prospects for future earnings, ability to pay interest, debt maturities, both current as well as long term, and profitability of sound dividend policy.

The main function of financial analysis is the pinpointing of the strength and weaknesses of a business undertaking by regrouping and analysis of figures contained in financial statements, by making comparisons of various components and by examining their content. The analysis and interpretation of financial statements represent the last of the four major steps of accounting.

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