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9fb81module 4 m&s

9fb81module 4 m&s

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Published by Shagun Agarwal
financial analysis
financial analysis

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Published by: Shagun Agarwal on Oct 16, 2013
Copyright:Attribution Non-commercial

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10/16/2013

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Name of Institution
1
FINANCIAL ANALYSIS
Objectives of financial analysis
 
To know the solvency of the firm
To find out the strengths and weaknesses of the firm
To make comparative study with other firms and intra-firm
To know the capability of payment of interest and dividend
To study the trend of business
To know the efficiency of management
To provide useful information to the management to make future decisions
To find out the earning capacity or profitability
 
Name of Institution
2
Tools for financial analysis
 –
 
Comparative statements
Common size statements
Trend analysis
 Accounting ratios
Cash flow statements
Funds flow statements
 
Name of Institution
3
Comparative Statements
Financial statements figures for two or more years areplaced side by side to facilitate comparison
Columns indicate increase or decrease in figures fromone year to another or change as a percentage
 Utility
 –
 
To make data simpler and more understandable
To indicate the trend of 
To indicate strong and weak points of business
To compare firm’s performance with average
performance of the industry
To help in forecasting

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