Financial statement analysis framework consists of 6 steps:
- 1: State the objectives and context
- Question to seek answer
- Resource and time available to perform the analysis
- 2: Gather data
- Data about: management, customer, suppliers
- 3: Process the data
- Calculate ratios
- 4: Analyze and interpret the data
- Answer the question
- Define conclusion
- 5: Report the conclusion
- Prepare a report and communicate to intended audience
- 6: Update the analysis
- Repeat and update when necessary