Everything that one business is doing reflects in the financial reports. Since financial reports can be complicated, they should be simplified through the financial analysis indicators
Financial analyses represent a tool for recognizing the key elements of the management reports, through a set of financial indicators. Understanding financial indicators, leads to evaluation of the ongoing working, identifying problems and opportunities, developing budgets and implementing strategies that leads to profitability, solvency and liquidity.
There are a number of key elements of the financial analysis of an enterprise that you need to be aware of, and can be found in the three basic financial statements that your company creates: income statement, balance statement and cash flow statement.
Recognizing these elements in your reports is being assisted through a set of financial indicators that in a common way enable you to answer your questions as to whether and how profitable, liquid, solvent and whether you have, or maintain a long-term success in your business.