There are different tools for analyzing the financial statements of a company, such as horizontal analysis, vertical analysis, ratios for measuring financial health and profitability, and so forth. But before we begin using these tools, it is important to know the purpose of each tool.

Q.1 Why do we need different tools for analyzing financial statements? Don't the numbers in the financial statements speak for themselves?

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Book for references

Financial Accounting: Tools for Business Decision Making 9th Kimmel, Weygandt and Kieso

2019 Wiley