Rojith Oushadhi
CHAPTER 1 1.1 INTRODUCTION TO THE STUDY
In our present day economy, finance is defined as the provision of money at the time when it is required. Every enterprise, whether big, medium or small, need finance to carry on its operations and to achieve its target. In fact, finance is so indispensable today and it is right said that it is lifeblood of an enterprise. Without adequate finance no enterprise can possibly accomplish its objectives.
Finance may be defined as the provision of money at the time when it is required. Finance reface to the management of flows of money through an organization. It concerns with the applications of skills in the manipulation, use and control money.
Financial analysis
Financial analysis (also referred to as financial statement analysis or accounting analysis) refers to an assessment of the viability, stability and profitability of a business. It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their bases in making business decisions. * Continue or discontinue its main operation or part of its business; * Make or purchase certain materials in the manufacture of its product; * Acquire or rent/lease certain machineries and equipment in the production of its goods; * Issue stocks or negotiate for a bank loan to increase its working capital; * Make decisions regarding investing or lending capital; * Other decisions that allow management to make an informed selection on various alternatives in the conduct of its business.
Financial analysts often assess the firm 's:
1. Profitability -its ability to earn income and sustain growth in both short-term and long-term. A company 's degree of profitability is usually based on the income statement, which reports on the company 's results of operations;
2. Solvency - its ability to pay its obligation to creditors and
In our present day economy, finance is defined as the provision of money at the time when it is required. Every enterprise, whether big, medium or small, need finance to carry on its operations and to achieve its target. In fact, finance is so indispensable today and it is right said that it is lifeblood of an enterprise. Without adequate finance no enterprise can possibly accomplish its objectives.
Finance may be defined as the provision of money at the time when it is required. Finance reface to the management of flows of money through an organization. It concerns with the applications of skills in the manipulation, use and control money.
Financial analysis
Financial analysis (also referred to as financial statement analysis or accounting analysis) refers to an assessment of the viability, stability and profitability of a business. It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their bases in making business decisions. * Continue or discontinue its main operation or part of its business; * Make or purchase certain materials in the manufacture of its product; * Acquire or rent/lease certain machineries and equipment in the production of its goods; * Issue stocks or negotiate for a bank loan to increase its working capital; * Make decisions regarding investing or lending capital; * Other decisions that allow management to make an informed selection on various alternatives in the conduct of its business.
Financial analysts often assess the firm 's:
1. Profitability -its ability to earn income and sustain growth in both short-term and long-term. A company 's degree of profitability is usually based on the income statement, which reports on the company 's results of operations;
2. Solvency - its ability to pay its obligation to creditors and
Bibliography: * T.S Reddy and Y. Hariprasad Reddy, Financial management, New Delhi: Tata Mc Graw hill Publishing company Ltd., 1999, 3rd edition. * S.N.Maheswari, S.K Maheswari “An introduction to Accounting” New Delhi, Vikas Publishing House (P) Ltd., 1999. [ 2 ]. Jones.M (1965), financial & profit analysis, Vikas publishing house pvt ltd, p. no 188 [ 3 ] [ 6 ]. ( Chien Ho, and Song Zhu, 1982, Company Performance Evalution) [ 7 ] [ 8 ]. Dr. P.N. Reddy(1999), Himalaya Publishing House, Dr. P.N. Reddy, Financial Management) [ 9 ] [ 10 ]. (Sudheesh Babu, 1998-2000, fertilizers and chemicals Travancore Limited) [ 11 ]