Question n. 1: Part 1 Financial statement analysis refers to a process of evaluating the financial performance of an entity and its financial position in relation to: Time period Industrial or social factors Economic or financial environment in which the entity operates company, so that the right decision can be made at the right time. In other words, it can be said that ratio analysis explores the pros and cons of the entity and is a useful technique for investors to observe the position and performance of the entity. The company's stakeholders, whether current or potential, are intended to obtain and secure the financial position and financial performance of the company in which they will invest. As Al Araqi trading company is willing to sell itself, that's why these reports have become more important to evaluate the company's position and performance. These ratios are based on financial statements prepared by management and normally audited by the company's auditor. The purpose of these reports is to facilitate investors to ensure whether they are investing rationally or not. While these financial statements are structured to evaluate the company's position, it is also necessary to conduct an analysis of these. This analysis is reported below. Financial statements are the primary source for preparing these reports. The reports are based on the following statements: • Balance sheet • Income statement • Statement of changes in equity • Cash flow statement • Supplementary or information notes. These reports are shown below. These are mainly classified into profitability, assets, debt and solvency ratios. Profitability Ratio: As we know that the main concern of companies is… middle of paper… As per market analysis that Small and Medium Enterprises (SMEs) contribute 16% to Oman's GDP. These SMEs have a maximum number of 100 employees, which is very low compared to other public companies, but they still contribute to the state's GDP. According to statistics published by the Ministry of Trade and Industry (MoCI), SMEs are businesses with a minimum number of employees as mentioned above but with a high annual turnover of 1.5 million Omani Riyals (3.8 million of dollars). Based on size and sales volume, businesses are classified into:1. Micro,2. Small and3. Medium size. According to the report published by the International Financial Corporation of the World Bank Group, Oman previously had a lower density of SMEs per capita. In Oman there are fewer than 10 per 1,000 people, compared to more than 30 per 1,000 people in Saudi Arabia..