Financial statement analysis is the process of analyzing an organization’s financial statements to better understand its performance, position, and health. This analysis involves reviewing both the quantitative and qualitative information in the financial statements. It includes reviewing ratios and trends such as income, expenses, profits, liquidity, and solvency, as well as qualitative factors such as management strategies and competitive environment. The purpose of financial statement analysis is to help investors, creditors, and other stakeholders decide whether to invest in the company, and to identify any potential risks or areas of improvement.