Financial analysis is the tool of finance. With financial analysis, company can know his financial position’s strength and performance of his operations. It can also compare with other companies financial statements. It is also to find the financial strengths and weakness of company. For analysis, Accounts manager establishes relationship between different items of balance sheet and profit and loss account. There are many ways of financial analysis. We can analyze the financial statements by making comparative statements, common size statements, trend analysis, statement of changes in working capital, fund flow statement and cash flow statement, cost volume profit analysis and ratio analysis.
Objectives of Financial Analysis
1. To understand company’s position and performance with better way.
2. To know the trend of business sale, purchase, profit, assets and investment.
3. It is helpful to estimate future earning, interest, strength to repay the loans by explaining the meaning of financial data.
4. Because in financial statement both analysis and interpretation are included so financial analysis can understand general public also.
5. Financial analysis is just treatment of Doctor. I can give a simple example. Suppose, you feel weakness and you go to Doctor. Doctor investigate your body by checking your body temperature, blood pressure and other your diagnosis reports and the he starts your treatment. Financial analysis is also investigation of financial statements and discloses its weakness, after this, management can solve the problems of weakness by taking good actions.
Objectives of Financial Analysis
1. To understand company’s position and performance with better way.
2. To know the trend of business sale, purchase, profit, assets and investment.
3. It is helpful to estimate future earning, interest, strength to repay the loans by explaining the meaning of financial data.
4. Because in financial statement both analysis and interpretation are included so financial analysis can understand general public also.
5. Financial analysis is just treatment of Doctor. I can give a simple example. Suppose, you feel weakness and you go to Doctor. Doctor investigate your body by checking your body temperature, blood pressure and other your diagnosis reports and the he starts your treatment. Financial analysis is also investigation of financial statements and discloses its weakness, after this, management can solve the problems of weakness by taking good actions.
how to do qualitative financial statement Analysis.......
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