Running head: BIBLICAL FINANCIAL ANALYSIS 1

Biblical Financial Analysis

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Biblical Financial Analysis

Just like in other areas of human life, the field of business involves various processes that

are essential to the success of a business organisation in financial and ethical spheres. One of

these processes is economic analysis. In definition, financial analysis is the process through

which a company’s businesses, budgets, and projects amongst other entities are subjected to

valuation to determine their stability, viability, and performance. This valuation involves the

analysis of factors such as the industry characteristics, company’s business strategies, its value,

profitability, and the risks involved among others. A detailed evaluation of these factors informs

the stakeholders how their organisation is performing and provides insights into the most

appropriate steps to take to improve the business.

Looking at the critical areas of business listed above and their importance in the success

of a company, one realises that being meticulous and exercising honesty in the process of

financial analysis are aspects whose importance cannot be underestimated. Typically, this

process helps investors to determine the stability, liquidity, solvency, and profitability of an

entity and find out whether or not it warrants the monetary investment (Columbia University,

n.d). As such, any form of dishonesty in evaluating these factors could mislead an organisation

and cause it enormous financial loses.

Concerning this issue, it is imperative that the company management develops a culture

of honesty and transparency and sets policies that ensure all the employees, especially those

dealing with financial analysis, distance themselves from acts of dishonesty. In the book of

Leviticus 19: 35-37 the bible cautions Christian business people against involving themselves in

any form of fraud in the course of their tad activities. These verses encourage people to practice

honesty in their use scales involving quantity, weight, and length amongst others.
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Besides hurting the customers, dishonesty in any business activity including financial

analysis has catastrophic repercussions on the involved business organisations. Accountants

could commit financial statement fraud in various workplaces settings. In a situation where a

company is seeking to apply for financial assistance such as a bank loan, for instance, exports

may be required to carry out asset valuation to determine its worth (Lockwood, 2015). In such a

case, if the accountants practice dishonesty by providing the parties involved with factious

financial data, the company in question may have trouble in repaying the loan within the

stipulated period.

Besides facing the problem in the repaying the loans, financial fraud could also lead an

organisation into unnecessary legal suits with the involved financial institution. Lenders base a

company’s creditworthiness on the information provided through business evaluation. The

statements enable them to determine whether the business generates as much income as the

owners say. As such, giving incorrect figures make these lenders take unnecessary risks that

could lead them to lose. The book of Deuteronomy 25:13-16 encourages Christians to desist

from having different measures in their business, as this would be an indication of dishonesty.

Similarly, financial analysts are legally duty-bound to guarantee the accuracy of the data they

provide in their analysis and failure to do this tint a company’s image.

In light of these issues, it is clear that financial analysis is one of the essential processes

in the field of business, should be handled with utmost care. Besides the contemporary laws

against fraud in industry, various books in the bible also warn Christians to keep off from being

dishonest in their dealings.

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References

Columbia University. (n.d). Financial analysis and valuation for strategic decision making.

Columbia University. Retrieved from: https://www8.gsb.columbia.edu/execed/program-

pages/details/1028/FAV

Lockwood, A. (2015). There's no containing water asset valuation methodologies. Water:

Journal of the Australian Water Association, 42(3), 36.