Definition
The basis of a financial analysis consists of the balance sheet, the profit and loss statement, and the annual report of a company.
Tasks of Financial Analysis
Using this data, accounting examines, for example, how economically a company operates. In addition, the financial analysis provides information about the success and liquidity, i.e. the solvency, of a company.
Internal and External Financial Analysis
A financial analysis can be prepared on a voluntary basis, e.g. for internal purposes. However, it is also relevant on a statutory basis for authorities, e.g. tax offices.