What aspect is typically included in financial statement analysis?

Financial statement analysis typically involves evaluating key aspects of a company's financial performance, including liquidity and profitability. Liquidity refers to a company's ability to meet its short-term obligations, while profitability indicates how well a company can generate income relative to its revenue, operating costs, and other expenses. Analysts often utilize various financial ratios and metrics, such as the current ratio for liquidity and return on equity for profitability, to gain insights into the company's financial health.

This thorough evaluation helps stakeholders, such as investors, creditors, and management, make informed decisions regarding the business's operational efficiency and ability to sustain growth. Understanding these metrics is critical for a comprehensive assessment of how well the company is positioned in the marketplace and its potential for future success.