Financial analysis is a crucial process that helps businesses assess their financial health, identify growth opportunities, and make informed strategic decisions. By analyzing financial statements, key performance indicators (KPIs), and market trends, companies can optimize resources, improve profitability, and mitigate risks. The process involves evaluating financial statements such as income statements, balance sheets, and cash flow statements to determine a company’s overall performance. Key metrics like revenue growth, profit margins, return on investment (ROI), and liquidity ratios provide valuable insights into financial stability and operational efficiency. Ratio analysis is a fundamental technique used in financial analysis. Liquidity ratios assess a company’s ability to meet short-term obligations, while profitability ratios measure overall earnings performance.