Analyzing Financial Reports

At the Institute of Business Analysis in Israel we analyze financial reports for business purposes such as company evaluation, second opinion, estimates prior to business purchases or sales and reviewing the influence of changes over the business or operational aspects of the company.

A proper and advanced analysis is essential for every company. Reaching incorrect or partial conclusions from a financial report may lead to an erroneous decision-making development and even severe damages to a company. Today, the “Safe Credit” system and other advanced tools such as “IBEX-Pro” are available and accessible to anyone, from the company’s share holders to its accountant. 
 

Performing advanced analysis on financial reports is recommended for receiving a comprehensive view of the company’s current state. The business analysis report or the report analysis done to determine the R&O (Risk-Opportunity) index of a company will be significant and assist in understanding the reports and in making the proper, educated decisions.

Financial reports gather and reflect the important pieces of information on the financial performance of businesses and companies. Thanks to uniform principles for writing these reports, we are able to analyze and compare between companies from various fields and industries. Although the reports reflect mainly financial data, an advanced analysis of these reports enables us to understand and conclude a great deal about the company’s overall condition. A proper and advanced assessment of the reports enables us to evaluate the financial, operational and marketing performance and establish a review on the company’s business strength. An analysis or summary from the company’s accountant may not always be satisfactory, and therefore the reports should be analyzed from other angles which will allow us to see a complete, comprehensive picture of the company’s state. Financial reports are generally edited and written by an accountant or finance manager. The financial report analysis should not be underestimated and must be performed using advanced tools, a business analysis center or other professional entity. Many accounting firms tend to attach a business analysis or business performance report allowing the share holders and directors of a company to receive a broader understanding of the company’s situation and make more educated and founded decisions.

Types of financial statements

Balance
The balance report is a financial report describing a company or organization’s financial condition at a specific point in time. It reflects an entity’s obligations, assets and equity at the said time. This type of report is usually done once a year, or in public companies, even once every quarter. The balanced report is mainly performed for incorporate businesses and has great meaning for a third party such as an investor, tax authorities, banks or sources of funding. Of course, the balanced report is also very important for the share holders. A proper analysis of the report gives the ability to make educated decisions for those who need to make financial decisions, such as investors.

Profit and Loss
A profit and loss statement is a financial report entailing a business’s financial performance at a given time period. This report generally reflects quarterly or yearly data and is frequently used to analyze a company’s profitability at a specific time and even for comparison between different times. The profit and loss statement is an essential part of the decision making process for a business, and the results shown in it are often crucial. There are additional types of financial reports required from public companies, such as a cash flow statement and a statement of changes in equity.