Post a 200-300-word response to the following discussion question.

What is the purpose of financial statement analysis? What are some tools we might use to analyze financial performance? What might we use to benchmark performance? Why?

Post a 200-300-word response to the following discussion question.

What types of financial ratios are used to analyze financial performance? Are some more important than others? Why? Which ratios are important to creditors, investors, and managers? Why?

Post a 200-300-word response to the following discussion question.

Describe the difference between liquidity and long-term solvency. How do they relate? Provide examples

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Question 1

What is the purpose of financial statement analysis? What are some tools we might use to analyze financial performance? What might we use to benchmark performance? Why?

Answer

The main purpose of financial statements is usually to provide business entities’ financial performance and information. This information is then used by many people and sectors to make economic decisions. For instance, managers require this information to manage the company’s activities. Through assessing the company’s financial performance, managers will establish ways of either improving its activities or maintaining them. For instance, it will be able to know which …

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