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2.2 The Objectives of the Financial Analysis Process

The financial analytical approach should be tailored to meet the specific requirement as there can be variety of reasons for performing financial analysis, the numerous available techniques, and the substantial amount of data. The following points should be kept in mind:

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  • Purpose of the analysis
  • Level of detail required
  • Data to be presented to whom

Having clarified the purpose and context of the analysis, we can then move on to the selection of the techniques (e.g., ratios) that will best assist in making a decision.

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