Financial analysis is the process of evaluating businesses, projects, budgets, and other finance-related transactions to determine their performance and suitability. Typically, financial analysis is used to analyze whether an entity is stable, solvent, liquid, or profitable enough to warrant a monetary investment.The most important benefit if financial statement analysis is that it provides an idea to the investors about deciding on investing their funds in a particular company. ... Financial statement analysis is helpful to the government agencies in analyzing the taxation owed to the firmFinancial analysis tools are different ways or methods of evaluating and interpreting company's financial statements for different purposes like planning, investment and performance where some of the most used financial tools based on their usage and requirement are common size statement