Monday, 1 July 2013

financial analysis

1.   Introduction to the Report
2.   Scope of the Study
3.   Objectives of the Study
4.   Limitations
5.   Research Methodology
1.   Company Profile
1.   Data Analysis and Interpretation
1.   Findings
2.   Suggestions


            Finance is regarded as the lifeblood of a business enterprise. Finance is one of the basic foundations of all kinds of economic activities. Finance function may be defined as the procurement of funds and their effective utilization. The funds should be managed properly and it is considered as the important function for a finance manager. This leads to effective managerial decisions and these decisions are analysed based ion expected inflows and outflows of funds and their effects upon managerial objectives. The main finance functions are investment decision, financing decision, dividend decision and liquidity decision.
            Business finance is that business activity which is concerned with the acquisition and conservation of capital funds in meeting financial needs and overall objectives of business enterprise.

                A financial statement is an organized collection of data according to logical and consistent accounting procedures. These statements are prepared for presenting a periodical review or report on the progress by the management and deal with status of investments in the business and results achieved during the period under review.
                Financial analysis helps to pinpoint the strong points and weaknesses of the enterprise. According to Kennedy and Muller, “Analysis and interpretation of financial statements are an attempt to determine the significance and meaning of financial statement data so that forecast may be made of the prospects for future earnings, ability to pay interest and debt maturities and probability of a sound dividend policy.
Financial analysis helps in ascertaining whether adequate profits are being earned on the capital invested in the business and  to know whether the business is in a position to pay its short term and long-term liabilities in time. It also helps the management to make a comparative study of the profitability of various firms engaged in same trade and  in accessing whether the firm will have sufficient profits to pay the amount of interest in time and the capacity to pay the dividend in future at a higher rate.

            This study helps to know the financial position and future prospects of the company. Effective utilization of capital employed, efficient use of assets and improvement in financial position, inflows and outflows of cash, changes in working capital position can be understood from the financial statements.

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