The Relevance of Financial Analysis And Its Impact On The Business Environment 2018-2023. Literature Review

Abstract

Financial analysis plays a crucial role in proper management and decision-making in business, considering that the accounting process is carried out within the suggested regulations to ensure the accuracy and reasonableness of the generated financial information. It provides valuable information to top management about the economic and financial situation of the company, enabling them to assess its current performance and anticipate potential future difficulties. This study employed the PRISMA methodology, and through literature review, theories, models, methods, and tools used in financial analysis during the period 2018-2023 were analyzed, evaluating their contribution to business success. The main theories and models of financial analysis used in this period have been identified and analyzed. Key aspects of importance include the risk in verbal communication, the relationship between the effective tax rate and microeconomic determinants in investors' investment decisions, the suitability of preparing financial statements according to national or international accounting standards, and the impact of performance-based compensation plans on CEO decisions.