Definition for : Financial analysis
Using economic and accounting information, financial analysis aims at discovering a company's real situation, based on coded data. It also makes it possible to make a full assessment of the analysed company and its Future prospects. On a practical level, financial analysis first places the company in its economic environment: Market, sector, Production processes, distribution channels, motivations of the people working for the company. Then, the analyst progressively studies Wealth creation, Investment and financing policies, and concludes on the Profitability of the company.
(See Chapters 8 and 14 of the Vernimmen)
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