Editing Financial analysis (section)

== Firm-level analysis==
Financial analysts often assess the following elements of a firm:

# '''Profitability''' - its ability to earn income and sustain growth in both the short- and long-term. A company's degree of profitability is usually based on the [[income statement]], which reports on the company's results of operations;
# '''Solvency''' - its ability to pay its obligation to [[creditor]]s and other third parties in the long-term; 
# '''Liquidity''' - its ability to maintain positive [[cash flow]], while satisfying immediate obligations;
# '''Stability''' - the firm's ability to remain in business in the long run, without having to sustain significant losses in the conduct of its business. Assessing a company's stability requires the use of both the income statement and the balance sheet, as well as other financial and non-financial indicators.

Both 2 and 3 are based on the company's [[balance sheet]], which indicates the financial condition of a business as of a given point in time.