Although financial statements provide information useful to decision-makers, there is much relevant information that they omit. Factors of market demand, technological developments, union activity, price of raw materials, human capital, tariffs, government regulation, subsidies, competitor actions, wars, acts of nature, etc. can have a dramatic effect on a company's prospects.
A critical assumption in the use of financial statements (aside from stewardship), is often made that the past will predict the future. For trends that have continued for many years this will usually be true, at least for the near future. Ratio analysis for a single company or within an industry using similar accounting methods will be the most fruitful way of using the data provided by financial statements.
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