Financial statements need to be properly interpreted and effectively analyzed to get meaningful decisions (The Financial Analysis). Financial Analysis is a very effective tool of monitoring the firm from all perspectives i.e. stockholders, investors, creditors, managers.

Financial analysis includes interpretation of financial statements and establishment of relationships between several items (or elements) of financial statements for specific conclusions. In simple words, Financial Analysis is a process to find out the performance, efficiency, profitability, financial soundness and future prospects of a business, based on the financial statements of a business. The relationships, in the form of ratios, can be established between the items of any one of the financial statements (P&L, B/S or C/F) or a combination thereof for a particular period. Sometimes, a trend (e.g. year on year growth etc) of various elements of financial statements or ratios for different periods is established to assess the long term performance of the business.

The application is useful for those introducing themselves to the world of Finance and are keen to understand the fundamentals. The application will be the best guide for the beginners to understand key definitions and quick reference for most frequently used terms and ratios with easy navigation. The definitions have been provided in Part-I and in Part-II, the ratios are arranged according to five broad categories i.e.

1.Liquidity ratios
2.Capital Structure Ratios
3.Activity / Turnover Ratios
4.Profitability Ratios
5.Valuation Ratios