The goal of the financial analysis is to look at how much money the company makes in sales, how much money it can keep for shareholders after all expenses and taxes, and how much money it has made in sales and profits in the past. The sources of funding that a company has used to create its assets are also examined in the financial analysis. It also include a review of the amount of cash generated by its operations and how that cash is used, such as for investments or debt repayment. The goal is to locate organisations with a strong financial position and the ability to grow in the future. The most popular types of financial analysis are: Vertical, Horizontal, Leverage, Growth, Profitability, Liquidity, Efficiency, Cash Flow, Rates of Return, Valuation, Scenario & Sensitivity and Variance. Looking at several components of the income statement and dividing them by revenue to express them as a percentage is a vertical sort of financial analysis. The findings of this exercise should be compared to those of other companies in the same industry to assess how well the company is performing. Horizontal analysis is the process of analysing multiple years' worth of financial data to determine a growth rate. This will assist an analyst in determining whether a firm is growing or shrinking, as well as identifying key patterns. One of the most prominent tools analysts use to analyse corporate performance is leverage ratios. A single financial indicator, such as total debt, may not be particularly illuminating on its own, therefore comparing it to a company's total equity can assist provide a more complete picture of the capital structure. The debt-to-equity ratio is the end consequence. Any financial analyst's job include analysing historical growth rates and estimating future ones. Profitability is a sort of income statement analysis in which an analyst evaluates how appealing a company's economics are. Liquidity analysis is a sort of financial research that focuses on a company's balance sheet, specifically its capacity to meet short-term obligations (those due in less than a year). Efficiency ratios are an important component of any thorough financial study. These ratios assess how successfully a corporation manages and utilises its assets to create revenue and cash flow. Analysts in a variety of finance jobs spend a significant amount of time analysing cash flow characteristics of organisations. The Statement of Cash Flows is a wonderful place to start, with each of the three main sections: operating activities, investment activities, and financing activities all worth looking at. At the end of the day, investors, lenders, and finance professionals are all concerned with earning a risk-adjusted rate of return on their investments. As a result, calculating return on investment (ROI) is crucial in the sector. Financial analysts spend a lot of time in Excel constructing financial models to estimate what a company is worth. At the end of the day, investors, lenders, and finance professionals are all concerned with earning a risk-adjusted rate of return on their investments. As a result, calculating return on investment (ROI) is crucial in the sector. Financial analysts spend a lot of time in Excel constructing financial models to estimate what a company is worth.

Sruthy Santhosh

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