Financial statements as the basis for ratio analysis
Business growth and successful development of an entity should be based on quality
business information. In that sense, financial statements are the unavoidable source of
information of the financial position, performance and cash-flows.
The most significant financial statements that we should take into account when
examining the entire business quality and make decision for the future are (figure 2):
1. balance sheet
2. income statement or profit and loss account
3. cash flow statement
4. statement of changes in equity