Accountancy

The utility of cash flow analysis

            Cash flow analysis yields the following advantages: It is very helpful in understanding the cash position of the firm. This would enable the management to plan and coordinate the financial operations properly. Since it provides information about cash which would be available from operations the management would be in Read more…

By Anagha Sanil, ago
Accountancy

Analysis of operational efficiency

 The operational efficiency of an organisation is its ability to utilise the available resources to the maximum extent. Success or failure of a business in the economic sense is judged in relation to expectations, returns on invested capital and objectives of the business concern. There are many techniques available for Read more…

By Anagha Sanil, ago
Accountancy

Ratio from share holders point of view

Preference Dividend Cover: This ratio expresses Net Profit after tax as so many times of Preference Dividend Payable. This is calculated as:   (Net Profit after tax / preference dividend) Equity Dividend Cover: This ratio provides us with information about net profit available to equity shareholders. This ratio expresses profit Read more…

By Anagha Sanil, ago
Accountancy

Fixed assets Analysis

 The successful operation of a business generally requires some assets of fixed character. These assets are used primarily in producing goods and in operating the business. With the help of these, raw materials are converted into finished products. Fixed assets are not meant for sale and are kept as a Read more…

By Anagha Sanil, ago
Accountancy

Capital structure or leverage ratios

 Financial strength indicates the soundness of the financial resources of an organisation to perform its operations in the long run. The parties associated with the organisation are interested in knowing the financial strength of the organisation. Financial strength is directly associated with the operational ability of the organisation and its Read more…

By Anagha Sanil, ago
Accountancy

Tools for Financial Analysis

 The following are the important tools of financial analysis which can be appropriately used by the financial analysts: Common-size financial statements Comparative financial statements Trend percentages Ratio analysis Funds Flow analysis Cash Flow analysis Common-size Financial Statements: In this type of statements figures in the original financial statements are converted Read more…

By Anagha Sanil, ago