Financial Analysis

UNIT 2 Financial Statements
2.1 Types of Financial Management systems- meaning &

objective
2.2 Financial analysis- tools for analysis
2.3 Trends and common- size analysis
2.4 Statement generation fundamentals

Financial analysis :

The analysis techniques & tools can be used for both internal as well as external sequence
regarding an exacting business group. The present economic situation are evaluated by the
supervision & proficient with the help of Wahid theory achieved by financial analysis techniques
& tools

Financial analysis techniques & tool involves assessment of both the internal as well as the
external factor of the business. This helps in equally biased as well as goal quantity of the special
processes. The logical tool can be used for evaluating the company's overall economic return,
capital financing processes and the working income.

Financial analysis techniques & tools is a very immense material of financial & business area, it
is impossible to the present whole of the function of Financial analysis through an articles
or report , also as a financial consultant I have tried to explained it shortly that financial analysis
techniques & tools in an organizations operations,

The most important concept is break-even analysis. This determines the point at which your
business begins making a profit.

Break-even analysis is mainly vital in the planning stages of your business. It shows what
sales and fees you need to create on a daily, weekly or monthly base, in classify to pay your
everyday expenditure.

To put collectively a break-even analysis, you must first separate variable costs from fixed costs.
Fixed costs are predictable on a monthly base, and arise whether or not you are open for business,
although variable costs modify according to your business operations, for instance the cost of
your supplies, material or labor. Financial analysis mainly takes or done
tree decisions through his techniques and tools, financial analytical techniques equally can be
filled up into these decision units.

I. Investment decision,
II. The financing decision, &
III. The dividend decision.

(I).Investment Decisions:

Investment decisions are possibly the most vital of the three types of financial decisions, because
Different techniques are used for effective management of short-term Cash and accounts
receivable than for purchases of long-term fixed assets. Investment judgment in this perspective
refers to both short- and long-term reallocations of company funds. Short term investment
judgments include the level of current assets (cash, accounts receivable, and inventories)
necessary for everyday operations; whereas long-term investment judgments refer to fixed
asset purchases, mergers, acquisitions, and corporate reorganizations

(II). Financing Decisions:

While making financial decisions, the financial analysis must determine the best financing
combine or capital makeup for the company. In this logic, the best alternative is the capital
makeup that allows the best evaluation of the company for the shareholders. The vital rudiments
to judge in making financial decisions comprise: (1) the personality and friskiness of the business
function; (2) the capital makeup desired; (3) the extent of time the assets will be needed; and (4)
the cost of different financing.

III. The dividend decision:

The dividend policy that the business chooses is also a subject of analysis in financial
management. Techniques, The three typical dividend alternatives-the stable dividend policy, the
even payout ratio, and the standard low dividend policy in addition extra-must be evaluated
according to the company's exact position
Financial Analysis Techniques: Financial Analysis Techniques is embattled toward external
reporting and analysis, following generally accepted accounting principles (GAAP) as the
foundation for the data used, this is a proper guideline & .which will be helpful for discover how
to financial analysis used techniques & tools in an organizations operations,

accept the information, models & studies used to effectively communicate the financial side
of your business to your non-financial generation
assessment, restore and keep informed for your analytical skills to gain better insight into
an organizations operations
affective assessment drivers to recover the value of your business
Employ sustainable development techniques to assess your increase theory
exemplify and correspondence the impact of operations on cash flow to your operational
invention

Financial Analysis Techniques: Financial Analysis Techniques educate or informed you to use
financial information effectively so you can develop better insights and analysis of your
organization. You will be able to learn about:
External analysiscompetitors, customers and suppliers
Internal analysisliquidity, cash flow and performance
Evaluating alternative analysis strategies
Integrating key metrics

Financial analysis techniques & tool can be used for Wahid theory .The expression or Wahid
stands for:

W- Wakefulness
A - Accountable
H - Heed
I - Intelligence
D- Determination

Wahid theory is just guide to the financial consultant, financial planner, financial adviser,
business owner, reader from end to end a complete financial valuation and financial valuation
tools in an organization that professionals can use in preparing business valuations. I hope this
prepared to possible during used on a Wahid theory basis.

Wahid theory on valuing businesses conveyed in a series of easily understandable Exposed to
total financial consulting issues: Financial valuations are very much affected by specific
facts and circumstances. Every situation is unique and differing facts and circumstances may
result in variations of the applied methodologies. Nothing contained in these written materials
shall be construed to represent the rendering of valuation advice; the expos of a valuation
opinion; the picture of any other professional opinion or service.

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UNIT 2 Financial Statements

2.1 Types of Financial Management systems- meaning &

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