what is an example of financial statement analysis 
an analyst may first look at a number of ratios on a company s income statement to determine how efficiently it generates profits and shareholder value for instance gross profit margin will show the difference between revenues and the cost of goods sold if the company has a higher gross profit margin than its competitors this may indicate a positive sign for the company at the same time the analyst may observe that the gross profit margin has been increasing over nine fiscal periods applying a horizontal analysis to the company s operating trends 