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Assessment of the firms past financial conditions & prediction of future. Done to find firms financial strengths and weaknesses
Sources of Data
Annual reports
Annual Report
Annual Report is an annual publication that public corporations must provide to shareholders to describe their operations and financial conditions.
Financial Highlights Letter to the Shareholders Management's Discussion and Analysis Financial Statements Notes to Financial Statements Auditor's Report
Financial Statements
performance of the company for the year ended. financial status as on date. cash inflows & outflows during the year.
Balance Sheet
Cash Flow
Shareholders:
about the financial position of the company to help them to take investment decisions. decision making awareness about the performance of the management tax
Creditors /Lenders:
Management:
Workers:
Government:
analyze loans and cash flow projections of stock prices market penetration & impacts to profitability Human Resources compensation analysis Senior Management corporate strategy Sourcing Manager Sourcing Strategy Sales Managers commission rates on sales Internal Financial Analysts profitability analysis Customer Service Managers efficiency ratios
Souring Strategy
Analysis of Financial Statements to:
Understand the suppliers financial & cost structure. Assessment of a supplier from long term business perspective. Analyse competitive performance of companies.
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330 99 429
I ITI
TOT L LI BILITIES
965
TOT L SSETS
965
11
Balance Sheet:
(Interpretaion for Analysis viewpoint)
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o t a l in c o m e a le s In d u s t r ia l s a le s t h e r in c o m e
P r io r p e r io d in c o m e
t r a o r d in a r y in c o m e
m a t e r ia l e
Pa c Po
a g in g e fuel
penses a te r c h a r g e s
P u r c h a s e o f f in is h e d g o o d s C o m p e n s a t io n t o e m p lo y e e s In d ir e c t t a e s
e llin g d is t r i u t io n e e p r e c ia t io n i s io n f o r d ir e c t t a
penses
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Pro
es
u t s o u r c e d p r o f e s s io n a l o ir e c t o r s f e e s
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o y a lt ie s t e c h n ic a l n o eas e rent o th e r r e n t
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Cashflow Statement
Cost & expenses of property, plant and equipment, salaries, raw material
quity investors
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Ratio Analysis
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Standardize financial information for comparisons Evaluate current operations Compare performance with past performance Benchmarking performance against other firms Study the efficiency of operations
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Ratio Analysis
Li uidity Ratios Efficiency Ratios Profitability Ratios Long Term Viability Ratios
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Li uidity Ratios
Current Ratio:
Li uid Ratio
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Efficiency Ratios
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Profitability Ratios
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Limitation of Ratios
Based on numbers Creative accounting distorts ratios Sometimes difficult to interpret deviations in the ratios Other analysis also important
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CAS S UDY
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SUPR
Income Sales ther Income Total Income
AU OS
(R cs)
LL INDIA PV LTD
(Rs cs) % of S es % of S es
Raw material consumption cost has gone up in 09. Employee cost Cost Labour & of labour charges have charges has come down. come down.
Expenditure Increase /Decrease in stock Raw Material Consumed Labour Charges ther Direct Expenses Employee Cost Administrative Exps Total Exps PBDIT Depreciation PBI Finance Charges Misc Exps w/off PB ax PA
-122.15 2053.09 213.67 36.41 174.55 118.64 2474.20 292.65 87.25 205.40 182.26 0.82 22.33 8.09 14.24
-112.77 1294.18 214.17 37.56 171.41 84.47 1689.02 218.12 57.375 160.74 96.79 0.82 63.14 7.975 55.16
-4.4% 74.3% 7.7% 1.3% 6.3% 4.3% 89.6% 10.6% 3.2% 7.4% 6.6% 0.0% 0.8% 0.3% 0.5%
-5.9% 67.9% 11.2% 2.0% 9.0% 4.4% 88.6% 11.4% 3.0% 8.4% 5.1% 0.0% 3.3% 0.4% 2.9%
Profits have come down mainly due to rise in R cost & Interest cost.
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Thank you
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