Which of the following statements about financial analysis is correct?

The statement that financial analysis can include both financial strengths and weaknesses is accurate because effective financial analysis involves a comprehensive review of an organization's financial position. This includes evaluating its assets, liabilities, revenues, and expenses to understand not only where the organization excels but also where it may face challenges.

Financial strengths might be reflected in high revenue growth, strong profit margins, or a solid cash flow position, while weaknesses could be highlighted by rising debt levels, declining revenues, or any unfavorable trends in financial ratios. A thorough analysis requires a balanced view of both sides to inform strategic decision-making, risk assessment, and performance improvement efforts.

Some other perspectives on financial analysis may be too narrow, such as focusing only on qualitative data, solely examining revenue trends, or analyzing just the income statement. Financial analysis is inherently multi-faceted and integrates various financial statements and metrics to assess overall organizational performance.