The methods of financial analysis include trend analysis, ratio analysis and factor analysis.
(a) trend analysis, also known as level analysis, is the same indicators in two or more consecutive periods of financial reporting for comparison, to determine the direction of change, amount and magnitude of its increase or decrease, in order to illustrate the trend of changes in the financial position and operating results of enterprises.
(ii) ratio analysis refers to the use of financial statements of the ratio of two related values to reveal the financial position of enterprises and results of an analytical method.
(C) factor analysis method, also known as factor replacement method, chain substitution method, it is used to determine the extent of several interrelated factors on the analysis of a comprehensive financial or economic indicators, an analytical method.
The starting point of this method is that when there are a number of factors that have an impact on the object of analysis, it is assumed that each of the other factors are unchanged, and the impact of changes in each of the factors alone is determined sequentially.
Extended Information
The main purpose of financial analysis is to make relevant evaluations for management decisions. Management decision-making is a wide-ranging concept, and as far as financial analysis is concerned, management decision-making here includes two main categories: one is investment decision-making; the other is credit decision-making.
In fact, these two kinds of decisions are involved in enterprise valuation, and to assess the value of the enterprise, and must return to the assessment of profitability and risk, profitability and risk a can not be less.
So in the financial analysis, the most important work should be the financial data of an enterprise in the industrial economy, securities and other capital market environment for multiple comparisons, in-depth analysis of the financial data and corporate strategy to link the examination of existing strengths and weaknesses, and scientifically assess the profitability and risk of the enterprise.
Baidu Encyclopedia-Financial Analysis