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There are a few people within a company that would have interest in reading the financial
statements. One person that would have a huge interest in reading the financial statements would
be the financial analysist. Financial analysts are often employed by mutual and pension funds,
hedge funds, securities firms, banks, investment banks, insurance companies, and other
businesses, helping these companies or their clients make investment decisions. Financial
analysts employed in commercial lending perform "balance sheet analysis," examining the
audited financial statements and corollary data to assess lending risks. In a stock brokerage house
or in an investment bank, they read company financial statements and analyze commodity prices,
sales, costs, expenses, and tax rates to determine a company's value and project future earnings.
Financial statement analysis is the process of reviewing and analyzing a company's
financial statements to make better economic decisions. These statements include the income
statement, balance sheet, statement of cash flows, and a statement of changes in equity. Financial
statement analysis is a method or process involving specific techniques for evaluating risks,
performance, financial health, and future prospects of an organization (Hales, 2011).
In any of these various institutions, the analyst often meets with company officials to gain a
better insight into a company's prospects and to determine the company's managerial
effectiveness. Usually, financial analysts study an entire industry, assessing current trends in
business practices, products, and industry competition (Knorr-Cetina, 2014). They must keep
