Finance Project
CHAPTER-1
1. INTRODUCTION
1.1. INTRODUCTION AND DESIGN OF THE STUDY Financial statements refer to the statements, which are prepared by a business concern at the end of the years. These are:-
1. Income statement or trading profit & loss account which are prepared by a business concern in order to know the profit earned and loss sustained during a specific period.
2. Position statement or balance sheet which is prepared by a business concern on a particular date in order to know its financial position.
These two statements by themselves will not provide the required information for the interested parties such as investors, creditors economist, financial executives and the general public as they contain only consolidated data and would not provide any scope for decision making. Hence, there is a need for analysis and interpretation of the financial statements.
An attempt to determine the significance and meaning of the financial data, through analysis and interpretation provides a comprehensive understanding of the business operations and the financial health of the enterprises.
In the words of Myers, “Financial statement analysis is largely a study of relationship among the various financial factors in a business as disclosed by a single set if statements and a study of the trend of these factors as shown in a series of statements.
1.2 FINANCIAL PERFORMANCE ANALYSIS
Financial performance analysis is a method used for finding out the financial strength of the business. Financial analysis is the process of making a study on the financial and operational data contained on the profit & loss account and balance sheet. These can give valuable information to external and internal uses of data. Financial analysis is the process of scientifically making a proper and comparative evaluation of the profitability and financial health of the given concern as a basis of summarized and analyzed data
1. INTRODUCTION
1.1. INTRODUCTION AND DESIGN OF THE STUDY Financial statements refer to the statements, which are prepared by a business concern at the end of the years. These are:-
1. Income statement or trading profit & loss account which are prepared by a business concern in order to know the profit earned and loss sustained during a specific period.
2. Position statement or balance sheet which is prepared by a business concern on a particular date in order to know its financial position.
These two statements by themselves will not provide the required information for the interested parties such as investors, creditors economist, financial executives and the general public as they contain only consolidated data and would not provide any scope for decision making. Hence, there is a need for analysis and interpretation of the financial statements.
An attempt to determine the significance and meaning of the financial data, through analysis and interpretation provides a comprehensive understanding of the business operations and the financial health of the enterprises.
In the words of Myers, “Financial statement analysis is largely a study of relationship among the various financial factors in a business as disclosed by a single set if statements and a study of the trend of these factors as shown in a series of statements.
1.2 FINANCIAL PERFORMANCE ANALYSIS
Financial performance analysis is a method used for finding out the financial strength of the business. Financial analysis is the process of making a study on the financial and operational data contained on the profit & loss account and balance sheet. These can give valuable information to external and internal uses of data. Financial analysis is the process of scientifically making a proper and comparative evaluation of the profitability and financial health of the given concern as a basis of summarized and analyzed data
Bibliography: 1. FINANCIAL MANAGEMENT : KHAN. M. Y & JAIN. K 2. MANAGEMENT ACCOUNTING : SHARMA. R. K & SHASHI . K. GUPTA 3. FINANCIAL MANAGEMENT : I. M. PANDEY 4. PRINCIPLES OF MANAGEMENT ACCOUNTING : S. N. MAHESHWARI 5. FINANCIAL MANAGEMENT : PRASANNA CHANDRA published annual Reports of Chettinad cement corporation ltd WEBSITE: www.chettinad cement .com