Category Archives: FINANCIAL STATEMENTS ANALYSIS

Finance assignment help Australia

Finance assignment help Australia Introduction Essential takeaway for the students of finance is the understanding of monetary markets that come convenient while making any financial investment. After pursuing a course in Finance and composing finance tasks and essay, students are familiar with about the monetary markets. Courses in Finance can be partitioned into significant topics, such as Options and futures, Ma

FINANCIAL ANALYSIS

Financial Analysis is an analysis that is used to distinguish or separate the parts of whole to target to know its elements and principles. Through this analysis, it is possible to study the limits, characteristics and possible solutions to a problem. FINANCIAL ANALYSIS homework-help Word Financial, moreover, comes from finance, which is a concept linked to public finance, goods and flows. The notion of finances

Conceptual Diversity

Conceptual Diversity Yet another factor which influences the usefulness of ratios is that there is difference of opinion regarding the various concepts used to compute the ratios. There is always room for diversity of opinion as to what constitutes shareholders equity, debt, assets, profit and so on. Different firms may use these terms in different senses or the same firm may use them to mean different things a

Impact of Inflation

Impact of Inflation The second major limitation of the ratio analysis as a tool of financial analysis is associated with price level changes. This weakness of the traditional financial statements which are based on historical costs. An implication of this feature of the financial statement, as regards ratio analysis is that assets acquired at different periods are, in effect, shown at different prices in the ba

Difficulty in Comparison

Difficulty in Comparison One serious limitation of ratio analysis arises out of the difficulty associated with their comparability. One technique that is employed is inter-firm comparison. But such comparisons are vitiated by different procedures adopted by various firms. The differences may relate to: • Differences in the inventory valuation (e.g. last in first out, first in first out average cost and cost)

Limitations

Limitations Ratio analysis is a widely used tool of financial analysis. Yet, it suffers from various limitations. The operational implication of this is that while using ratios, the conclusions should not be taken on their face value. Some of the limitations which characterize ratio analysis are (i) difficulty in comparison, (ii) impact of inflation, and (iii) conceptual diversity. Finance-Assignments.comIns

Trend Analysis

Trend Analysis Finally, ratio analysis enables a firm to take the time dimension into account. In other words, whether the financial position of a firm is improving or deteriorating over the years. This is made possible by the use of trend analysis. The significance of a trend analysis of ratios lies in the fact that the analysts can know the direction of movement, that is whether the movement is favorable or

Inter-firm Comparison

Inter-firm Comparison Ratio analysis not only throws light on the financial position of a fum but also serves as a stepping stone to remedial measures, This is made possible due to inter-firm comparison and comparison with industry averages. A single figure of a particular ratio is meaningless unless it is related to some standard or norm. One of the popular techniques is to compare the ratios of a firm with

Overall Profitability

Overall Profitability Unlike the outside parties which are interested in one aspect of the financial position of a firm, the management is constantly concerned about the overall profitability of the enterprise. That is, they are concerned about the ability of the firm to meet its short-term as well as long-term obligations to its creditors, to ensure a reasonable return to its owners and secure optimum utilizat

Operating Efficiency

Operating Efficiency Yet another dimension of the usefulness of the ratio analysis, relevant from the viewpoint of management, is that it throws light on the degree of efficiency in the management and utilization of its assets. The various activity ratios measure this kind of operational efficiency. In fact, the solvency of a firm is in the ultimate analysis, dependent upon the sales revenues generated by the u