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.
Word Financial, moreover, comes from finance, which is a concept linked to public finance, goods and flows. The notion of finances is used to name the study of the circulation of money between individuals, companies or states.
Financial analysis, therefore, is a method to analyze the financial implications of business decisions. This requires applying techniques to collect relevant information, to perform various measurements and draw conclusions. In order to fully understand the meaning of financial analysis, we have to turn to establish its etymological origin. In this sense, we find that the first word, analysis, emanating from the Greek and is made up of three distinct parts: the “ana” prefix, meaning “up”; the verb “lyein” which stands for “release”; and the suffix “-sis” which is equivalent to action.
On the other hand, financial is a word that comes from Latin as demonstrated by the fact that it consists of the word “finis” which gave rise to the French term “financer” meaning pay off a debt, and the suffix “-ero “which comes to indicate membership of something.
Thanks to the financial analysis, it is possible to estimate the performance of an investment, consider your risk and whether the cash flow of a company reaches to meet payments, among other issues.
Financial analysis helps to understand business performance and maximize returns from the performance of existing resources. Managers can access information about the expected effect of strategic decisions.
In addition to the above so far, it is important to know that all financial analysis has an identical structure. It is a union of several sections which are those that contain the data necessary to reach a certain conclusion. Specifically, it consists of various areas given below:
Accounts: In this case, all information concerning both the financial statements of the company in a question, as the liquidity of it, the risk or profitability is included.
Heritage: Specifically, in this section what is necessary is to perform an analysis of the assets that the company has, for example, her composition, the various assets and the weight that they have on the whole, the evolution that has taken in recent years.
Liabilities: It is the ability to check that the company has to repay the debts contracted.
Economic analysis: This is made when it comes to determining whether an entity is actually getting sufficient or no profitability.
Investors: They also appeal to financial analysis to analyze the riskiness of their decisions and to set goals to fulfill. Lenders and creditors, finally, financial analysis used to determine what risk there is for copper of a credit or loan.
Financial statement analysis is defined as the analysis and comparison of financial statement of two or more companies with each other. Analysis and comparison can be done by the professionals are the experts of the finance, who also make reports on it after taking the information about the company from different kinds of financial statements. Our financial analysis homework help is the most popular financial service of our company which provides financial analysis homework to the clients.