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What are some Financial statement analysis tools?

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Answered 2012-08-23 10:59:57

1.Commansize Balence sheet analysis

2.Comparative Balence sheet analysis

3.Trend analysis

4.Ratio Analysis

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Give some topic relating to summer project in finance?

Financial statement analysis of a company.Loan procedure in a bankStudying the dividend policy of a companyRatio analysis of a company (although it is covered under Financial statement analysis)study of mutual fundscash management in an organization.

Difference between financial reporting and financial statement?

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What are the merits and demerits of ratio analysis?

Financial ratio analysis is a useful tool for users of financial statement. It has following advantages:AdvantagesIt simplifies the financial statements.It helps in comparing companies of different size with each other.It helps in trend analysis which involves comparing a single company over a period.It highlights important information in simple form quickly. A user can judge a company by just looking at few numbers instead of reading the whole financial statements.LimitationsDespite usefulness, financial ratio analysis has some disadvantages. Some key demerits of financial ratio analysis are: Different companies operate in different industries each having different environmental conditions such as regulation, market structure, etc. Such factors are so significant that a comparison of two companies from different industries might be misleading.Financial accounting information is affected by estimates and assumptions. Accounting standards allow different accounting policies, which impairs comparability and hence ratio analysis is less useful in such situations.Ratio analysis explains relationships between past information while users are more concerned about current and future information.

Disadvantages of financial audits?

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What are the Sources of Data for Financial Ratios?

Financial ratios of all company's can be calculated based on their financial statements that would be declared during their quarterly result announcement. Balance Sheet, Income Statement, Statement of Cashflows, Statement of Earnings etc are some of the documents from which the information required for calculating these financial ratios can be picked up. Also, if the company is listed in the stock market, its current stock price too is used for calculating some of these ratios.

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What is the meaning of ratio analysis types of ratio analysis importance of ratio analysis?

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