1. Why consider Financial Ratio Analysis?

Ratio analysis compares line-item data from both the companies’  financial statements to reveal insights
regarding profitability, liquidity, operational efficiency, and solvency. Ratio analysis can be used to look
at trends over time to compare companies (TCS and Infosys).

2. Why consider the balanced scorecard analysis?

The balanced scorecard is used to attain objectives, measurements, initiatives, and goals that result
from these four primary functions of a business. Companies can easily identify factors hindering
business performance and outline strategic changes tracked by future scorecards.

3. Which is one is better-Ratio analysis or Balanced Scorecard?

Ratio analysis measures only the financial performance of a company. On the other hand, the balanced
scorecard assesses the financial as well as the non financial performance of a company. So, in order to
consider the optimal decision making, both the financial and non financial aspects are important to
consider. Hence, the balanced scorecard analysis is a better method to consider. But, this doesn’t mean
we can ignore the importance of the ratio analysis is evaluating the financial performance of
organizations/companies within any industry/sector.

4. Why do companies consider financial analysis?

Companies consider financial analysis in order to:

 Assess the past performances

 Evaluate the present performances and position
 Predict the future performances

5. What are the sources used?

 Research libraries like Research gate
 Business periodicals
 Internal HR source
 Information services like CRISIL, ICRA, CMIE

Please refer the assignment and slides for getting information on:

 Benefits and limitations of ratio analysis

 Benefits and limitations of balanced scorecard
 Profitability ratio, liquidity ratio, efficiency analysis, meaning and calculations
 Balanced score card
 Elements of balanced score card