How to Prepare a Financial Statement Analysis Report?

Everyone knows that financial performance is the primary measure of success for any commercial business. For a company to remain viable and enjoy success in both the long and short term, it is essential to monitor its finances closely. Whether you are planning to attract investors to finance business growth, or you simply want to gain a comprehensive view of how your company is performing, a financial statement analysis report will help you to do this.

As its name suggests, a financial statement analysis report provides a detailed breakdown of a company’s financial health. Here, we will explore how you can prepare a financial statement analysis report for your business.

The structure of the financial statement analysis report

Understanding the structure of the report will give you a far more precise idea of what the finished report will look like and will make it simpler for you to piece together the information. The basic framework of the financial statement analysis report comprises the following:

Executive summary – although this will appear first in the finished report, this will be the last section that you write. The executive summary will feature an overview of the report and feature headlines of the key findings of your analysis.

Resources and data collection – using accurate, up-to-date information is vital to derive a meaningful analysis of your company’s finances. Listing the resources you have used to obtain the data is essential for clarification and verification purposes.

Financial events – your financial events section will include headline economic events that have had an impact on the company’s performance during the period covered by the analysis report.

Results in detail – this detailed section will breakdown the data you gathered earlier and analyse it in detail. Presenting this information accurately and commenting on your findings will help you to identify and highlight the critical points in your report.

Variance analysis – this section of the report will compare performance over time and allow further opportunities for comment and deeper analysis. Many valuable insights can be gained by analysing and comparing variations in performance over time.

Projections – this final section of the report will give details of the company’s expected future performance based on past performance data.

Gather your information

Before you can begin writing your report, you need to have the relevant data ready to analyse and include in your report. You will need to gather together data that details your business’s operating costs, balance sheet, cash flow sheet, income statement, and inventory data. Be mindful that you may have to request some of this data from other departments in your company, so it is best to ask in plenty of time so that you have all the information you need when the time comes to produce your report. Having all the data to hand is essential as comparisons between different data sets will form a crucial part of your analysis.

Preparing the report

Once you have all the data, you need you will be ready to start writing your financial statement analysis report. It is helpful to write an overview of the scope of the report to clarify in your own mind what you want to cover in the report and also for the benefit of the reader.

Analysing your data will be the most time-consuming part of the report. When you produce your results in detail section, you will need to clearly present your data using tables, graphs and charts as appropriate. The same applies when working on your variance analysis as graphs, tables and charts will help you provide a visual representation of the data and present the variations more clearly.

Once the main sections of the report have been written, you will need to produce your projections for the future. These projections will be based on your variance analysis and your detailed results section. Combining the key findings of these sections should help you to produce insightful predictions for future financial performance. You will then need to write your executive summary, which provides an overview of the aims of the report and its main findings.

Help with preparing a financial statement analysis report

Producing a financial statement analysis report is a detailed, time-consuming process. If you would like assistance with creating a financial statement analysis report for your business, we can help. As a Financial Management Services company here at Zuizz, we provide a comprehensive range of services, including producing financial statement analysis reports. So, if you want to manage your company finances effectively, we can help.

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