Financial analysis is the process of identifying the financial strengths and weakness of firms by proprly establishing relationship between the items of balance sheet and profit and loss account. Financial analysis can be undertaken by managment of firms or by parties outside the firms or by parties outside the firms , owner, creditors, investor and others.The financial analysis helps to know the liquidity of organization.
The liquidity of organizati
onis known by seeing the profitability. The investors who have invested their amount in the firms share are most concerned with the earning of firms.They are also intrested infinancial position to extent it influencesthe firms earning ability.through financial analysis they try to find out position of organization,efficiency of assects , investors position e.t.c.
onis known by seeing the profitability. The investors who have invested their amount in the firms share are most concerned with the earning of firms.They are also intrested infinancial position to extent it influencesthe firms earning ability.through financial analysis they try to find out position of organization,efficiency of assects , investors position e.t.c. 
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