Scope of Financial Statement Analysis

The role of financial reporting by companies is to provide information about a company’s performance, financial position, and changes in financial position that is useful to a wide range of users in making economic decisions.

The role of financial statement analysis is to use financial reports prepared by companies, combined with other information, to evaluate the past, current, and potential performance and financial position of a company for the purpose of making investment, credit, and other economic decisions.

Analysts seek to examine the past and currentperformance and financial position of a company in order to form expectations about its future performance and financial position.