Describe the sources of information for financial statement analysis.

Describe the sources of information for financial statement analysis.

Expert Solution

The main sources of information for financial statement analysis are balance sheet, income statement and cash flow statement. Balance sheet of the the company describes about the companies available asset and liabilities at a given point of time. Also it gives the available resources with the company. In a nutshell a balance sheet provides a complete information regarding what the company is about to receive from its operation and to whom the company is liable to pay which is known as asset and liability respectively.

One of the other source of information in analysing the financial statement is income statement where buy it gives a complete information regarding the the process of operation of a company. It provides information related to to the net profit margin is the company is earned by selling it's product. This statement also provides a future viability of the company as constant loss will be a negative impact on the investors as well as other shareholders.

Cash flow statement is also one of the source of information which provides a detailed analysis of cash generated by the company during its operation and cash expended or invested during the period. this statement shows the liquidity which the company have in paying off its liability.

With the help of the above sources of information a person can easily analyse the financial statement of a company.

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ekkarill92 answered 2 years ago

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