Company Financial Analysis
No one statement provides sufficient information for company financial analysis.
But by putting together the three financial statements, the analyst has the information needed to understand the financial position, profitability, and operating, investing, and financing activities of a company.
All three company financial statements are connected. The profit or loss from the income statement will be reflected in the assets and liabilities of the balance sheet.
Changes in cash flow will be displayed in both the balance sheet and income statement and vice versa.
Understanding the purpose of company financial statements, and how each of the three relates to one another, provides important information for company financial analysis.
This article was republished with permission from Arbor Investment Planner.