Final answer:
Ratio analysis, vertical analysis, and cash flow analysis are key tools to understand a company's financial position.
Step-by-step explanation:
When it comes to understanding a company's financial position, profitability, and operating, investing, and financing activities, three key analyses are helpful. These are ratio analysis, vertical analysis, and cash flow analysis.
Ratio analysis involves examining financial ratios such as the current ratio, return on investment, and debt-to-equity ratio to assess a company's performance and financial health. Vertical analysis involves comparing financial statement items as a percentage of a base figure, such as revenue, to identify trends and changes over time. Cash flow analysis involves examining the inflows and outflows of cash from operating, investing, and financing activities to assess a company's ability to generate and manage cash.