How to Analyse a Financial Statement? 🔢

Let's Find out? ⤵

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#stocks #business
Financial statement analysis is the one go-to analysis you should do before investing in any company.

It is used by shareholders as well as stakeholders to evaluate the business for better decision-making to understand the overall health of the company.

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It is the process of analysing and assessing:
1⃣Profit & Loss
2⃣Balance Sheet
3⃣Cash Flow Statement of the company.

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• Profit & Loss Statements

P&L gives a good picture of the Profitability of a company.
P&L statement showcase all the expenses incurred and revenue generated during a financial year.
Thus, the statement is divided into two sections, namely
👉INCOME
👉EXPENSES.

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• Balance Sheet

After preparing the profit & loss statement, you move forward to the Balance Sheet, which shows the company's financial position in a given financial year.

It is divided into segments, namely,
👉Shareholder funds
👉Assets
👉Liabilities.

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The inflow and outflow of cash are clearly depicted in the Cash Flow Statement.

The cash flow statement is divided into 3 sections:
1⃣Cash flow from Operating Activities
2⃣Cash flow from Investing Activities
3⃣Cash flow from Financing Activities

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Find detailed information about analysing companies' financial statements before investing in them on:

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blog.finology.in/stock-market/c…

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