What is Financial Analysis?

A definition of Financial Analysis

“Financial analysis involves evaluating financial information to understand a company’s performance and make informed decisions. It includes analyzing balance sheets, income statements, and cash flow statements.”

Financial Analysis in Business Glossary - What is a Financial Analysis?

Business Glossary > What is Financial Analysis?


Examples of Financial Analysis in a Sentence:

Financial analysis helps investors determine a company’s value.

Our team conducts financial analysis quarterly to guide strategy.

Accurate financial analysis can uncover potential risks in investments.

Why is Financial Analysis Important in Business?

Financial analysis is critical for stakeholders to assess a company’s health and make strategic decisions. It provides insights into profitability, liquidity, and financial stability, guiding investment choices and operational improvements.

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Associated Terms

Here are some associated business terms and synonyms for “Financial Analysis”:

  • Financial Evaluation
  • Economic Analysis
  • Ratio Analysis

Amazon Financial Analysis

Amazon’s financial analysis in 2020 showed a rise in revenue due to increased online shopping during the pandemic. Analysts examined its cash flow and profitability ratios to forecast future growth prospects.

Final Notes on Financial Analysis

Understanding financial analysis allows businesses to evaluate performance, identify improvement areas, and plan strategically. Investors use it to assess potential returns and risks in investments.


This has been a definition of Financial Analysis meaning.

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