Tools of  Financial analysis:
Comparative Statements:- These are the statements showing the profitability and financial position of a firm for different periods in a comparatively form to give an idea about the position of two or more periods.
Common Size Statements:- These are the statements which indicate the relationship of different items of a financial statement with some common item by expressing each item as a percentage of the common item.
Trend Analysis:- It is a technique of studying the operational results and financial position over a series of years. Using the previous years’ data of a business enterprise, trend analysis can be done to observe the percentage changes over time in the selected data.
Ratio Analysis:- It describes the significant relationship which exists between various items of a balance sheet and a profit and loss account of a firm.
Cash Flow Analysis:- It refers to the analysis of the actual movement of cash into and out of an organisation.