# NEED AND IMPORTANCE OF THE STUDY • Financial analysis is the process of identifying the financial strengths and weakness

of the firm by properly establishing relationships between the items of balance sheet and the profit and loss accounts.

The purpose of financial analysis is to diagnose the information contained in financial statements, so as to judge the profitability and financial soundness of the firm.

The financial statement must be made simpler for any reader to understand the operating results and financial health of the business. This is done with the help of the following tools of financial analysis.

SCOPE OF THE STUDY Analysis of Financial Perfrormance can be undertaken by different persons and for purposes. Trend percentages analysis. Common-size financial statements. the ratio analysis is the most common. . The important of ratio analysis lies in the fact that it presents facts on a comparative basis. Cost-volume-profit relation. the following are some the techniques of the AFS: a) b) c) d) e) f) Comparative financial statements. and Ratio analysis and others.e. Statement of changes in financial position. It refers to the relationship expressed in mathematical terms between two individual figures or group of figures connected with each other in some logical manner and are selected from financial statements of the concerns. The last technique i. therefore the scope of the AFS may be varying from one situation to another. However. comprehensive and powerful tool of the AFS.

OBJECTIVES OF THE STUDY The study is aimed at evaluating the Financial Analysis of COMPANY. corrections. Profitability Ratios. . To get acquaint with financial and operational activities. The objectives of the study are as follows: • To examine the liquidity position of COMPANY. To identify the areas of scope for improvement. • • • • To measure the financial risk by calculating Leverage Ratios. . . overall human resource development are contributing towards the growth of the economy in a competitive domestic and global world as a whole. profit maximization.Karimnagar. To examine the efficiency of firm in managing and utilizing To measure the operating efficiency with the help of • • the assets by calculating Activity Ratios. • • To suggest necessary measures for improvements and To provide information to the management. To get exposed to the current financial situation under which the company with a motive of stake holder’s wealth maximization.