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Business LibreTexts

12.4: Financial Statement Analysis

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  • Learning Objective

    1. Evaluate a company’s performance using financial statements and ratio analysis.

    Now that you know how financial statements are prepared, let’s see how they’re used to help owners, managers, investors, and creditors assess a firm’s performance and financial strength. You can glean a wealth of information from financial statements, but first you need to learn a few basic principles for “unlocking” it.