Financial analysis is the process of evaluating a company's financial data to understand its performance and make informed decisions. This involves examining key financial statements, such as the balance sheet, income statement, and cash flow statement, to assess profitability, liquidity, and solvency. Analysts use various tools and techniques, including ratio analysis and trend analysis, to interpret the data. The goal of financial analysis is to provide insights that can guide investment decisions, budgeting, and strategic planning. It helps stakeholders, such as investors, creditors, and management, understand the financial health of a business and identify areas for improvement or growth.