A firm’s Financial Statement to shareholders presents two important types of information. The first is a verbal statement of the company’s recent operations and its expectation for the coming year. The second is a set of quantitative financial statement which report what actually happened to the firm’s financial position, earning, and dividends over the past year. Financial Statement are used to help predict the firm’s future earnings and dividends. From an investor’s standpoint, predicting the future is what financial statement analysis is all about. From management’s standpoint, financial statement analysis is useful both as a way to anticipate future conditions and more importantly as a starting point for planning actions that will influence the future course of events. Financial Statement are the end product of accounting process but are not free from limitation. They provide aggregate information to satisfy the general purpose needs of the users. They reflect historical information but not get idea about the organization performance. The financial statement are neither complete nor accurate as the flow of income and expense are segregated using best judgement apart from accepted concepts. Hence these statement need proper analysis before their use in decision making.