The study and interpretation of the relationships between various financial variables, by investors or lenders.
The process of calculating financial ratios for your business in order to determine trends and to compare its performance with that of other businesses in the same industry. (See Current Ratio, Debt to Equity and Gross Profit Margin.)
The analysis of financial statements as a means of determining the intrinsic value of a company. The analysis usually involves the comparison of liquidity, gearing and profitability ratios over time and between companies. This is the basic tool of fundamental analysts.