Financial Analysis Primer

This video talks about the basics of financial analysis – which is essentially an assessment of the viability, stability and profitability of an investment or business. Useful and meaningful information that reflect the health and viability of an investment decision or business derived from financial analysis is normally used by executive decision makers, bankers who lend money or Wall Street financial analysts.

In general there are 2 types of financial analysis: inter-company financial analysis and intra-company financial analysis. In turn, 3 basic methods of financial statement analysis can used to conduct either inter-company or intra-company financial analysis: Horizontal analysis, vertical analysis and financial ratio analysis.

Financial analysis is an indispensible tool and integral component in financial modeling, and is used to not just analyze the results of a financial modeling exercise, but also used as checking mechanisms to ensure that the results have been accurately calculated within the financial model. Be sure to also read our financial analysis tools articles and watch our video on stock analysis and valuation.

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