Liver function tests (LFTs) are essential for detecting liver disease, estimating damage, and monitoring treatment response, but they have limitations, such as not being specific for particular diagnoses. Key tests include measurements of synthetic function (like albumin and prothrombin time), cholestasis indicators (such as bilirubin and alkaline phosphatase), and enzymes indicating hepatocyte injury (like AST and ALT). The document also discusses neonatal jaundice and the significance of the serum-to-ascites albumin gradient in evaluating portal hypertension.