Carrying out a balance sheet analysis means studying the financial statements - and the data deriving from them - of a company, with the aim of better understanding the economic, asset and financial management of the company in question.
The balance sheet analysis is carried out through two techniques: the one by indices and the one by flows. In the first case we are talking about a static analysis based on the construction of relationships between suitably grouped values. In the second case, however, the balance sheet analysis is defined as dynamic and is based on the study of the company’s financial movements.
The financial statement analysis is carried out through three phases. The first is that of "literal interpretation" which makes it possible to understand what the individual items of the financial statements refer to. The second phase is that of “revisional interpretation”, thanks to which we are able to examine the regularity of the data. Finally we have the "prospective interpretation" phase: by analyzing the data, we predict the direction that the results achieved by the company will take.
