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Generally,there are two approaches to financial statement analysis,one the is the traditional approach where use of ratio analysis is applied and all information for analysis will be gathered from balance sheet and income statement.In recent times trend analysis and common-size statement has been used.The second is the modern approach where both internal and external business environment are taken into consideration.The approach is futuristic as opposed to traditional approach.

The financial statement may be also analyzed horizontally or vertically,across industry,in macro(in aggregate manner) and also in the firm either top down or bottom up.

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12y ago

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