Question

Why it is important to analyse financial statement data? How it can help in decision making of an organization?​

Answer 1

Answer:

"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."

Answer 2

Explanation:-

Analysis of financial data is very important in business because it helps the business to decide whether during the accounting period, the firm has earned a profit or incurred a loss.

Every business man or owner of the firm is curious to know that his business is incurring a loss or earning a profit because of an element of risk. He has invested his money.

Management takes many decisions by using financial statements.