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there are three meethods
1) Balancesheet analysys: Symtoms are judged based on balancesheet ratios major ones ,Liquidity ratios, FACR, workingcapital ratios, yield, ROC and IRR
2) Cashflow Analysys and cash budgets: There are two methods direct and indirect depend upon nature of business Mostly uses indirect method
3) Capital Budgeting ratios like enterprise value, Cost of captal, valution of business , intrinsic value of . shares etc
All three methods help anyone to give good insight in one's own business financial symptoms and also lead to resolution of the same
I hope this is suffice and comprehensive answer. Incase iam wrong please share views . as . well
Thanks for invitation,
Agree with the reply of Mr. Waleed Hassan.
Thanks for invitation
Techniques of analysis will include:
1. Comparison of financial statements over time
2 Trend analysis
3 common size statements
4. Ratio analysis etc
Two methods are used to analyze financial statements.
i. Horizontal Analysis
ii. Vertical Analysis
Horizontal Analysis is the comparison of financial information over series of reporting periods either by figures.
Vertical Analysis is the analysis of financial statements by using different types of ratios like Liquidity ratios, Activity ratios, Profitability ratios etc.