3.3 Financial Statement Analysis and Forensic Accounting
A comprehensive financial statement analysis provides insights into a firm’s performance and/or standing in the areas of liquidity, leverage, operating efficiency and profitability. A complete analysis involves both time series and cross-sectional perspectives. Time series analysis examines trends using the firm’s own performance as a benchmark. Cross sectional analysis augments the process by using external performance benchmarks (Industry or peers) for comparison purposes.