What is financial analysis primarily concerned with?

Financial analysis is primarily concerned with determining the viability, stability, and profitability of a business. This process involves evaluating an organization’s financial health through various metrics and key performance indicators, including income statements, balance sheets, and cash flow statements. By scrutinizing these financial documents, analysts can identify trends, project future financial performance, and make informed recommendations regarding the financial positioning of a business.

The focus on viability encompasses understanding whether a business can sustain its operations over the long term, while stability refers to the ability to maintain consistent performance even in the face of market fluctuations. Profitability is about evaluating whether the business can generate returns that exceed its costs over time. In essence, financial analysis serves as a critical tool for stakeholders—such as investors, managers, and creditors—ensuring they make sound decisions based on the organization's financial condition and strategic direction.

The other options, while important in their own right, do not directly align with the central purpose of financial analysis. Assessing potential investment opportunities is a component of financial analysis but not its primary objective. Creating marketing strategies and understanding consumer behavior, though essential for business success, fall outside the realm of financial analysis and focus more on market research and strategy development rather than the assessment of financial performance.