“Numbers don’t lie,” this is especially true in the case of financial analysis. The balance sheet of a company reveals a great deal about its solvency and business transactions. The balance sheet is the cornerstone of any company's financial statements, together with the income statement and cash flow statement. A balance sheet also known as a "statement of financial position," shows the assets, liabilities, and equity of a company. A balance sheet analysis is an examination of a company's assets, liabilities, and equity. The analysis procedure is used to derive accurate statistics about a company's revenue, assets, and liabilities. The entire assets must equal the total liabilities plus the paid-up equity share capital. Return on Assets (ROA) is calculated by dividing the net income by assets. Calculating specific accounting ratios on the basis of data provided by the balance sheet is used to determine a business's strength and weakness.

Bridgit Peter

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