Advantages and Disadvantages of Financial Statements Analysis

Posted on Saturday, September 26, 2009
This was posted in Accounting and Finance

Advantages of Financial Statements Analysis: The various advantages of financial statement analysis are:
1. Financial statements analysis helps the government agencies to analyze the taxation due to the company.
2. Any company can analyze its own performance through financial statements analysis over any period of time.
3. The investors get enough idea to decide about the investments of their funds in the specific company.

Disadvantages of Financial Statements Analysis
1. Strong financial statement analysis does not necessarily mean that the organization has a strong financial future.
2. Financial statement analysis might look good but there may be other factors that can cause an organisation to collapse.

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