Financial statement analysis project for MBA finance

Financial statements are prepared primarily for decision-making. They play a prominent role in setting the framework of managerial decisions. But the information provided in the financial statements is not an end in itself as no meaningful conclusions can be drawn from these statements alone. However, the information provided in financial statements is of immense use in making decisions through analysis and interpretation of financial statements.

A firm communicates financial information to the users through financial statements, and reports the financial statement contains summarized information of the firm’s financial affairs. Organized and systematic preparation of the financial statement is the responsibility of top management. The two basic financial statements prepared for the purpose of external reporting of owners, investors and creditors are:

Balance sheet (or statement of financial position)

Profit and loss account (or income statement)

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