Financial Statement Analysis

1) State the objective and context; 2) gather data; 3) process the data; 4) analyze and interpret the processed data; 5) report conclusions/recommendations; 6) follow up and update the analysis.

State the objective and context of the analysis — define the purpose, the questions to answer, and the format/resources before gathering any data.

To assess a company's past performance and current financial condition, forecast future performance, and support credit (lending) and equity (investment) decisions.

Income statement, balance sheet, statement of cash flows, and statement of changes in equity.

A narrative section where management discusses results, liquidity, capital resources, trends, and risks. It provides context and forward-looking insight but is generally unaudited.

Unqualified (clean), qualified (a specific exception), adverse (statements are not fairly presented), and disclaimer (auditor cannot express an opinion).