The functional approach to financial analysis

The functional approach to financial analysis
financial analysis concept

Doing a financial analysis means “making the numbers speak”. It is a critical examination of the financial statements in order to assess the financial situation of the company. To do this, there are two approaches. The functional approach and the financial approach. In this article Finance de Demain We present the first approach in detail.

The financial analysis process: a practical approach

The purpose of a financial analysis of the company is to answer questions relating to decision-making. A common distinction is made between internal and external financial analysis. Internal analysis is done by an employee of the company while external analysis is done by independent analysts. Whether it is carried out internally or by an independent, it must follow five (05) steps.