 Dear students, when we talk about financial statements analysis, we talk about the analysis of financial data contained in such statements. For financial analysis, we can say that it is the assessment of profitability, sustainability and viability of a product, a company or a group of company as a whole. Why we need financial statements analysis? Because there are certain users who use financial information for their decision making process. To communicate with such type of financial information users, financial analysis play an important role. This data is communicated by financial information developers to those people who use this type of data in their decision making process that provide them a base for the financial and economic decisions. Financial information needs to be shared with the internal and external users. Before we go for financial statements analysis, there are certain prerequisites we have to follow that. It is desirably good to have enough understanding of financial information, accounting information, business, industry, trade and other economic environments. There should be homogeneity in accounting policies of the companies whose data we go for analysis. There should be homogeneity in business lines of the industries for whom we prepare some sort of financial analysis. We are going to talk about users of financial information. There are certain users who use financial information for their financial needs. This list range from honours to employees, from government to media, from investors to researchers, creditors and management itself. We can divide these financial users into two different categories. Internal. When we talk about internal users, we talk about employees who need financial information to assess about the growth in their compensation, in their perks, in the days to come. When we talk about owners who are primary concerned with the financial information, these people use financial data to assess the viability, profitability and sustainability of their investment and security, liquidity of their investment. The third internal user is the management, who uses the financial information for assessing the outcome of their decision for business policies. They assess that whether the policies designed and implemented by the management have been proved fruitful or not. The second category of financial information users, we have creditors who use financial information to assess the profitability and liquidity of their data. Next we have another user that is researchers. There are professional researchers who use financial data for professional research. There are academic researchers, there are freelancers who use economic data, financial data for developing research theories or testing research theories. We have investors in the category who use financial data to assess the profitability of the concern they are intended to invest therein. These investors use financial information for their investment decisions. We have media, media uses financial information for giving awareness to the public about certain industries, certain economic units in the country, in the economy. We have government and other regulatory authorities, they use financial information data for designing economic policies in the country. There are certain regulatory authorities like tax departments, like environment protection departments, like public welfare departments, like financial regulatory departments. All these types of government regulatory authorities uses financial information. Such type of information is given to them through the financial statements. Remember that financial statements depict only the numbers. They don't give the theory underlying these numbers. So while one goes for financial statements analysis and conducts some sort of ratios, it is suggested that be careful while these financial analysis, so that your analysis should be meaningful for the users for whom you are doing such practices.