Financial statement analysis involves examining a company's financial reports to assess its health, performance, and profitability, focusing on liquidity, profitability, solvency, and efficiency. It includes business analysis, which evaluates broader strategic and operational factors. Key components of analysis include credit and equity analysis, accounting analysis, financial analysis, and prospective analysis, each serving to inform decision-making and identify risks and opportunities. Financial statements like the balance sheet, income statement, and cash flow statement provide insights into a company's activities and financial position, while additional reports such as MD&A and auditor's reports enhance understanding and transparency.