To What Extent Might the Cash Flow Statement Help to Overcome the Traditional Limitations of Financial Statement Analysis in Evaluating the Past Performance and Predicting the Future Successes or Failures of Business Organisations?
To what extent might the cash flow statement help to overcome the traditional limitations of financial statement analysis in evaluating the past performance and predicting the future successes or failures of business organisations?
Accounting is the major means of organizing and summarizing information about economic activities. The information which is provided by the accounting practices through financial statement analysis, provides help to decision makers to take decision. There are various forms of Accounting models which is of great help example if the financial statements for an organization is made statements like Balance Sheet, Profit and loss Account etc it helps the organization out to makes its stand in the market
Financial analysis is the processes of extracting decision-making information from the existing knowledge such as financial statements, thus the main aim of financial analysis is to transform the facts and figure maintained into useful information which are basically used by stakeholders to take decision before making any kind of investment in any kind of organization.
The individuals who are engaged in performing the financial analysis? Firms, in order to analysis the firm’s financial performance and the financial position it actually helps to have a comparative analysis which is an aid for decision making processes for an organization. The analysis is not just about “crunching numbers”; it involves obtaining a broader picture of the organisation in order to evaluate appropriately how that organisation is performing. It give a broader and clear picture which attaches meaning to the numbers and make everything.
There are two approaches to analysis the statements Traditional approach and Modern approach. The financial statements which are used in traditional approach are Balance sheet Income statement and one more tool which is used a traditional method is Ratio analysis
TRADITIONAL METHOD OF ANALYSING:
Balance sheet
Accounting is the major means of organizing and summarizing information about economic activities. The information which is provided by the accounting practices through financial statement analysis, provides help to decision makers to take decision. There are various forms of Accounting models which is of great help example if the financial statements for an organization is made statements like Balance Sheet, Profit and loss Account etc it helps the organization out to makes its stand in the market
Financial analysis is the processes of extracting decision-making information from the existing knowledge such as financial statements, thus the main aim of financial analysis is to transform the facts and figure maintained into useful information which are basically used by stakeholders to take decision before making any kind of investment in any kind of organization.
The individuals who are engaged in performing the financial analysis? Firms, in order to analysis the firm’s financial performance and the financial position it actually helps to have a comparative analysis which is an aid for decision making processes for an organization. The analysis is not just about “crunching numbers”; it involves obtaining a broader picture of the organisation in order to evaluate appropriately how that organisation is performing. It give a broader and clear picture which attaches meaning to the numbers and make everything.
There are two approaches to analysis the statements Traditional approach and Modern approach. The financial statements which are used in traditional approach are Balance sheet Income statement and one more tool which is used a traditional method is Ratio analysis
TRADITIONAL METHOD OF ANALYSING:
Balance sheet