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 management, investors, and stakeholders. By understanding financial health, organizations can identify strengths and weaknesses, forecast future performance, and develop strategies for growth and improvement.