Introduction
Financial statement analysis has proven to be useful in a wide range of business decisions. Equity analysts use it as a foundation for their projections of the earnings potential of a company. Credit analysts use it as a tool to determine whether loans should be granted or extended.
The corporate annual report is the primary document in financial statement analysis. However, corporate annual reports are only useful to those who can understand and interpret the messages conveyed. It is generally written for shareholders and other investors, although they are also required reading for lenders, banks and potential employees.