What are the tools for financial statement analysis?
Rachel Davis
Updated on January 02, 2026
Tools or Techniques of Financial Statement Analysis
- Comparative Statement or Comparative Financial and Operating Statements.
- Common Size Statements.
- Trend Ratios or Trend Analysis.
- Average Analysis.
- Statement of Changes in Working Capital.
- Fund Flow Analysis.
- Cash Flow Analysis.
- Ratio Analysis.
How do you make a financial statement?
How to Make a Financial Statement for Small Business
- Balance Sheet.
- Income Sheet.
- Statement of Cash Flow.
- Step 1: Make A Sales Forecast.
- Step 2: Create A Budget for Your Expenses.
- Step 3: Develop Cash Flow Statement.
- Step 4: Project Net Profit.
- Step 5: Deal with Your Assets and Liabilities.
Is Financial Analysis A tool?
Financial analysis tools are different ways or methods of evaluating and interpreting company’s financial statements for different purposes like planning, investment and performance where some of the most used financial tools based on their usage and requirement are common size statement (vertical analysis).
What are different types of financial analysis?
Types of financial analysis is analyzing and interpreting data by various types according to their suitability and the most common types of Financial Analysis are vertical analysis, horizontal analysis, leverage analysis, growth rates, profitability analysis, liquidity analysis, efficiency analysis, cash flow, rates of …
What is the main function of financial statement analysis?
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.
What are the objectives of financial statement analysis?
To assess financial statements which contain information on past performances and interpret it as a basis for forecasting future rates of return and for assessing risk. For determining credit risk, deciding the terms and conditions of a loan if sanctioned, interest rate, and maturity date etc.
