Plan of bachelor thesis “Financial diagnosis- a fundamental tool in valuating the financial

performance of a company “

1) INTRODUCTION.

In the introduction part, I will describe the importance and the actuality of chosen theme.
What is financial diagnosis, why it is important for a company and how it reflects the financial
performance of the company. The objectives and scope of the thesis will also be mentioned
in introduction. After that, I will describe in several sentences each chapter of the thesis. The
last point will be about the presentation of sources I used and a little description of annexes.

2) CHAPTER 1. THE THEORETICAL AND METHODOLOGICAL BASIS OF FINANCIAL DIAGNOSIS

 1.1. The concept and the typology of financial diagnosis

Describing the general idea and concept of financial diagnosis. I will mention the scholars and
different thesis regarding the financial analysis. General ideas about the financial diagnosis,
the basic models used for financial analysis will also be described in this subchapter. My
opinion with advantages and disadvantages regarding some of the models will be presented.

 1.2 Financial performance – concept and importance

Here I will speak about the definition of financial performance. I will generally describe its
concept, will present the importance of financial performance of a company and will explain
how it can be measured.

 1.3 Financial analysis ratios – a fundamental part of financial diagnosis

In this subchapter, I will present the main financial ratios, which help in financial diagnosis. I
will describe only the theoretical part here and will mention some peculiarities of each
category of ratios. For example, I will describe the liquidity ratios, risk ratios, return on
investment ratios, balance sheet ratios, etc. In this way, I will make a small introduction and
present the theoretical part of some ratios that will be used in the following chapters.

3) CHAPTER 2. ANALYSIS OF THE PERFORMANCE OF “BUCURIA” S.A. IN TERMS OF FINANCIAL

DIAGNOSIS
 2.1. Analysis of the balance sheet of the “BUCURIA” SA

In this subchapter, I will present the main balance sheet ratios, which help in elaboration of
financial diagnosis. I will explain and analyze the structure of the balance sheet, the assets
and liabilities of the company. In this way, I will also analyze and present the dynamics of
the company in the past years.

 2.2 Analysis of the income statement of the “BUCURIA” SA

This subchapter will describe the income statement of the “BUCURIA” SA. With the data
taken from the income statement, I will calculate ratios that will speak about financial
situation of the company. I will also analyze the earnings of the company, its evolution in
net profit/losses and its turnover. Vertical and horizontal analysis will also be performed
here.

 2.3 Analysis of the cash-flow statement of the “BUCURIA” SA

It will include a detailed cash-flow description and analysis. I will speak about the objective
and importance of cash flows, the cash flow structure and methods for evaluating and
reporting cash flows (direct and indirect). Cash-flow ratios also will be mentioned here.
4) CHAPTER 3. RISK ANALYSIS MEASUREMENT- A FUNDAMENTAL TOOL IN
VALUATING THE FINANCIAL PERFORMANCE OF THE “BUCURIA” SA

3.1 The analysis of the performance of “BUCURIA” SA according to the risk analysis
In this subchapter, I will analyze the performance of the company with the help of
profitability measurement, working capital efficiency measurement, liquidity ratios and
other investment ratios. After calculating the ratios and analyzing the situation, I will be able
to summarize the financial performance of the company and thus, to make a link between
financial diagnosis and performance of the company.

 3.2 Bankruptcy risk analysis of the “BUCURIA” SA

Here I will analyze the methods for the analysis of the bankruptcy risk. For analysis of the
bankruptcy risk, I will use the “Z” model, that was developed by professor Altman. It is also
named the Altman model. I will calculate the score of “BUCURIA” SA and in this way I will
observe what level it belongs to. Furthermore, in order to do a better analysis, I will also use
the Conan & Holder Model for calculating the bankruptcy risk for “BUCURIA” SA. In this way,
I will have 2 models and 2 different analysis of a bankruptcy risk. Thus, I will be able to make
a proper conclusion regarding the financial performance and situation of the company.

5) CONCLUSION

In this chapter, I will mention the most important conclusions and will analyze the results of the
research. I will also come with some proposals in order to improve the financial situation of the
company. In the conclusion part, I will also present my opinion about the financial performance
of the “BUCURIA” SA and its strong and weak points.