What is the main interest of management in financial statements analysis?

Assessing liquidity and solvency Measuring the effectiveness of managements decision To assess future performance To determine stability of earnings

Measuring the effectiveness of managements decision

Financial analysis is of utmost importance to the management of a firm as it holds the responsibility for overseeing all aspects of the company's financial health. The efficient utilization of resources and maintaining a sound financial condition lie within their purview. Through financial analysis, the management gains valuable insights into the company's operational success, evaluates individual performance, and assesses the effectiveness of internal control systems. Such analyses serve as crucial tools in aiding management decisions and ensuring the overall prosperity of the organization.