Financial Statement Analysis of Square Pharmaceuticals Ltd.

FINANCIAL STATEMENT ANALYSIS

Analyzing financial statements involves evaluating three characteristics: a company's liquidity, profitability and solvency. A short-term creditor such as a bank is primarily interested in liquidity - the borrower to pay obligations when they come due. A long-term creditor, such as a bondholder, looks to profitability and solvency measures that indicate the company's ability to survive over a long period of time. Similarly, stockholders look at the profitability and solvency of the company and want to assess the likelihood of dividends and the growth potential of the stock.

Three commonly used tools for financial statement analysis are:

i. Horizontal analysis evaluates a series of financial...