Finance

Analysis of Financial Statements

Analysis of Financial Statements

Financial statement analysis typically starts with reformulating the reported financial information. In relation to the income statement, one common reformulation is to divide reported items into recurring or normal items and non-recurring or special items. Financial statement analysis consists of (i) reformulating reported financial statements, (ii) analysis and adjustments of measurement errors and (iii) financial ratio analysis on the basis of reformulated and adjusted financial statements.