By

Rama Krishna Animireddy

Roll No : 109516
I - MBA

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 Understanding the definition of Financial Statements.

The Purpose of Financial Statements.

The Users of Financial Statements.

Limitations of Financial Statements.

Analysis of Financial Statements.

Techniques of Financial Statements.

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 What is a Financial Statement ?
A financial statement (or financial report) is a formal record of
the financial activities of a business, person, or other entity.

Balance Sheet
Income Statement
Statement of Retained Earnings
Statement of Cash Flows

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 To inform owners about the financial position of the Organization.

To inform managers the achievements/shortfalls in the performance of the business.

To secure finance and maintain finance.

To monitor performance of the business periodically.

To fulfill statutory obligations.

To assess tax liability.

To determine Liquidity, Solvency and Profitability of the business.

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 Owners Employees

Management Analysts and Advisors

Lenders Other Business Contacts

Tax Authorities General Public

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 Personal Judgement/Discretion.

Replacement cost is not Emphasized.

Current Economic Realities Ignored.

Qualitative Factors Ignored.

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 How is the firm mobilizing resources.

How is the firm making profits/losses.

How is the firm maintaining its assets and liabilities.

How is the firm taking care of liquidity, solvency and profitability of the business

TYPES OF ANALYSIS :
1.Horizontal Analysis vs. Vertical Analysis

2.Internal vs. External Analysis

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 Ratio Analysis

Fund Flow and Cash Flow Analysis

Common size Statement Analysis

Comparative Statements Analysis

Trend Analysis

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 1. Managerial Economics and Financial Analysis by A.R. Aryasri

2. http://en.wikipedia.org/wiki/Financial_statement

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