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Financial Analysis is to classify the data in simple form given in financial statements and to compare with each other

to find out the strong points and weakness of the business and to take decisions for future. For instance, if all items relating to current assets are placed in one group while all items relating to current liabilities are placed in another group, the comparison between the two groups will provide useful information. Actually the figures given in financial statements do not speak anything themselves. The analysis of these figures helps the interested reader by giving tongue to these mute heaps of figures.

In the words of Finney and Miller: Financial analysis consists in separating facts according to some definite plan, arranging them in groups according to certain circumstances and then presenting them in a convenient and easily read and understandable form.

In the words of John N. Myres: Financial statement analysis is largely a study of relationships among the various financial factors in a business, as disclosed by a single set of statements and a study of the trends of these factors as shown in a series of statements.

OBJECTS OR PURPOSE OF FINANCIAL ANALYSIS

The purpose of financial analysis depends on the needs of the person who is analyzing these statements. These varying needs may be :

(i)

To know the Earning Capacity or Profitability.

(ii)

To know the Solvency.

(iii)

To know the Financial Strength.

(iv)

To make comparative study with other firms.

(v)

To know the capability of payment of interest and dividend.

(vi)

To know the trend of the business.

(vii) To know the efficiency of management.

(viii) To provide useful information's to the Management.

INTRODUCTION Financial Management is that activity is concerned with the planning and controlling of the firms financial resources. Though it was a branch of economics till 1890 as a separate or discipline it is of recent origin. Financial management is concerned with the duties of finance manager in a business firm. He performs such as budgeting, financial forecasting, cash management, credit administration, investment analysis and fund procurement. The recent trend towards globalization of business activity has created new demands and opportunities in managerial finance. Financial statements are prepared and presented for external users of accounting information. As these statements are used by investors and financial analysts to examine the firms performance in order to make investment decisions, they should prepare very carefully and contain as much information as possible. The financial statements of the Company include Trading profit and Loss A/c and Balance sheet. The general purpose is to analyze the

statement to understand the financial performance of the company, management of various assets and liabilities and their relation. OVERVIEW OF PROJECT The topic of this project is Financial Performance Analysis at mahabal metals pvt ltd ,Financial Performance Analysis constitutes approach to judge the effectiveness of the financial function of the firm. Finance is needed to promote or establish the business, acquires fixed assets, make investigations, develop product, meeting day to day affairs of the company, encourage manager to make progress and create value. The project work during the period of study equips the youngsters with necessary experience and enhances the learner with adequate to the real field. It enables the learner to meet the challenges of a business world. STATEMENT OF THE PROBLEM. The financial statements reveal the true and fair view of the financial position of a concern .A proper analysis and interpretation of these statements enables a person to judge the profitability and financial strength of the business. The financial statement are prepared on the basis of recorded facts .The facts are recorded in monetary terms .The statement are prepared for a particular period and the transact orders .The financial statements are true and fair view of the financial position of the concern. .

Finance is the life blood of every business private as well as public. Therefore proper utilization of finance by the public sector enterprise is found necessary as it is financial by the government which is the SIGNIFICANCE OF THE STUDY.

representative of people. The financial performance of public enterprise has been a matter of wide interest and concern. The type of relationship to the investigated depend upon the objective and purpose of evaluation .The purpose of evaluation of financial statement differ among various groups or creditors, share holders, management, labor union and so on interested in the result and relationship reported in the financial statement, so ratio analysis is an effect in tool for analyzing the financial performance of the firm

METHODOLOGY The project evaluates the financial performance of the company with the help of the most appropriate tool of financial analysis like ratio analysis and comparative balance sheet . The data is largely depends on primary and secondary sources. Primary data is the first hand information that is collected during the period of research. Primary data has been collected through discussions held with the staffs in the accounts department. Secondary data studies whole company records and companys balance sheet in which the project work has been done. In addition, a number of reference books, journals and reports were also used for the study. Tools used for analysis 1. Common size statement 2. Comparative analysis 3. Ratio analysis

OBJECTIVES OF STUDY 1. To study financial position of company 2. To study solvency position of company 3. To study capital structure with the help of various ratios 4. To analyze profitability of firm 5. To study changes in financial position over last 5 years

CHAPTERISATION
The project report consists of five chapters. In this report the following elements are involved. The first chapter is introduction. Its consist of the general introduction of the topic, objective of the study in general and in particular, Statement of the Problem, Significance of study, Objectives, Methodology, Limitations, Period of Study, Study Area Second chapter includes financial statement analysis a theoretical perspective on financial statement analysis. It includes different tool for analysis and its limitation. Third chapter is profile of mahabal metal pvt ltd. It includes The Company History, Vision, Mission, Quality Policy, Companys Philosophy, Corporate

Objectives and Employee Profile. Fifth chapter includes data analysis and interpretation. Different methods such as

ratio analysis common size statement and a comparative analysis of various years are made. Sixth chapter deals with Findings, Suggestion, Conclusion.

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