Financial statements by themselves do not give the required information both for internal management and for outsiders. They are passive statements showing the results of the business i.e. Profit or loss and the financial position of the business. They will not disclose any reasons for dismal performance of the business if it is so. What is wrong with the business, where it went wrong, why it went wrong, etc. Are some of the questions for which no answers will be available in the financial statements.
Introduction
Learning Objectives
ՖՖ After
reading this lesson the reader should be able to:
ՖՖ understand
the nature and types of financial analysis
ՖՖ know the
various tools of financial analysis
ՖՖ understand
the meaning of ratio analysis
ՖՖ ppreciate
the significance of ratio analysis
ՖՖ understand
the calculation of various kinds of ratios
ՖՖ calculate
the different ratios from the given financial statements
ՖՖ interpret
the calculated ratios
2.2.3 Contents
Nature Of Financial Analysis
Types Of Financial Analysis
Tools Of Financial Analysis
Meaning And Nature Of Ratio Analysis
Classification Of Ratios
Capital Structure Or Leverage Ratios
Fixed Assets Analysis
Analysis Of Turnover (Or) Analysis Of Efficiency
Analysis Of Liquidity Position
Analysis Of Profitability
Analysis Of Operational Efficiency
Ratios From Share Holders’ Point Of View
Illustrations