Statement Analysis

statement analysis

An analysis of an organization's financial and operating condition through the use of financial statements. Statement analysis is used by financial analysts in an attempt to determine the value of a firm's securities.

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Statement Analysis

Research into data relating to the stability and profitability of businesses, especially to guide one's investing practices. At its most basic, statement analysis involves looking at financial statements to determine if a company is healthy. Balance sheets are important to statement analysis as they provide a ready-made means of investigating performance. However, it is important to note that quantitative statement analysis has limits: the accounting methods a particular business employs, for example, may make it look more or less healthy than it really is. It is also known as financial analysis. See also: Fundamental analysis.