Apex Printing, Inc



Apex Printing, Inc - Financial Analysis Techniques

How can you apply Financial Analysis Techniques to your own Personal Financial Management?

Several techniques that can be used in order to perform the analysis of financial statement for a particular business, but it all depend on the objectives that you are looking for. Statements that are generally used for the analysis are Income Statement, balance sheet and Cash Flow Statements.

The techniques that are used to analyze the financial statements are as under and these are the techniques that would be preferred for personal financial management due to their features and flexibility.

Trend Analysis: This type of analysis is also known as the time series analysis. It helps in understanding the performance of a particular business over a period of time that is under consideration. This analysis is performed by using the historical and forecasted data from the financial statements of that business (Helfert, 2001).

Financial ratio analysis is the most common and well known way of doing the trend analysis. At least two years ratios are required to make the analysis considerable. But to make it meaningful, there should be something to compare with the analysis such as previous year data. Another technique of financial statement analysis is common sizing. In this case income statement and balance sheet is analyzed using the percentages. All the values in income statement are presented as percentage with respect to sales, whereas all the values in balance sheet are presented with respect to percentage of total assets. In income statement, values are divided by total sales and in balance sheet they are divided by total assets. This analysis is considered as easy to understand and interpret, as all the values are in percentages (Zions Business Resource Center, n.d).

Percentage change analysis is also are technique but ...