American Institute of Certified Public Accountants (AICPA) Practice Exam

The primary goal of financial statement analysis is to assess the overall health and performance of a business. This encompasses evaluating various aspects of a company's operations, financial stability, and profitability through its financial statements. These statements, including the balance sheet, income statement, and cash flow statement, provide critical insights into how well the company is managing its resources, generating income, and sustaining operations.

While evaluating investment opportunities is certainly an important aspect of financial analysis, it is a subset of the broader objective of understanding the company's overall financial condition. Similarly, comparing financial data over multiple periods can offer valuable insights but is part of the larger process of analyzing the health and performance of the business. Determining the best allocation of company resources is also significant; however, it draws from insights gathered through a comprehensive analysis of the company's financial statements. Therefore, assessing the overall health and performance encompasses the various goals within financial analysis, making it the most comprehensive and fundamental objective.