A Study on Financial Statement Analysis Using Comparative and Common Size

Abstract

Financial Statement Analysis is a systematic process used to evaluate an organization's financial performance, stability, and operational efficiency by examining information presented in its financial statements. It enables management, investors, creditors, and other stakeholders to assess the financial health of a business and make informed decisions. Through the application of analytical tools such as comparative statements, common-size statements, trend analysis, ratio analysis, cash flow analysis, and fund flow analysis, organizations can identify strengths, weaknesses, growth patterns, and areas requiring improvement. Financial statement analysis also assists in evaluating profitability, liquidity, solvency, and overall financial performance over a specific period. This study highlights the concept, objectives, significance, methods, advantages, and limitations of financial

statement analysis. It further explains how these analytical techniques support effective financial planning, decision-making, and long-term organizational growth. The study provides a

comprehensive understanding of financial statement analysis and its practical importance in assessing the financial position and performance of business enterprises.