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Friday, December 3, 2010

financial analysis

I am reading about the financial analysis this afternoon because we will be having a recitation this coming Wednesday. Financial Analysis is an in depth review or study of the basic financial statements. It is connected with balance sheet that shows the position of the business and Income statement that shows the result of the operation. In financial analysis, the ratios are interpreted. These ratios are tools that are used in analyzing financial statement. There are two types of ratio comparison, the time series analysis and the cross sectional analysis. The time series analysis is the comparison of a single firm for two consecutive years while the cross sectional analysis is the comparison of two or more firms for financial ratios at the same point in time.