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Reference no. CN-0247-E
Published by: IESE Business School
Originally published in: 2025
Version: 16/6/25
Length: 10 pages
Data source: Generalised experience

Abstract

Financial analysis is a critical process used to evaluate a firm's performance in the context of its stated objectives, strategies, and external market conditions. The chapter explores the two primary tools of financial analysis: ratio analysis and cash flow analysis, emphasizing how these tools provide insights into profitability, growth, liquidity, and operational efficiency. By dissecting financial data through ratios and cash flows, analysts can better understand how effectively a firm utilizes its resources, executes its strategies, and manages its financial obligations.

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Abstract

Financial analysis is a critical process used to evaluate a firm's performance in the context of its stated objectives, strategies, and external market conditions. The chapter explores the two primary tools of financial analysis: ratio analysis and cash flow analysis, emphasizing how these tools provide insights into profitability, growth, liquidity, and operational efficiency. By dissecting financial data through ratios and cash flows, analysts can better understand how effectively a firm utilizes its resources, executes its strategies, and manages its financial obligations.

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