...FINANCIAL MANAGEMENT Financial Statement Analysis The process of determining financial strengths and weaknesses of a firm by establishing strategic relationship between the items of the balance sheet, profit and loss account and other operative data. Financial Statement Analysis Metcalf and Titard:It is a process of evaluating the relationship between component parts of a financial statement to obtain a better under standing of a firm’s position and performance. Financial Statement Analysis Purpose:To diagnose the information contained in financial statements so as to judge the profitability and financial soundness of the firm. Types of Financial Analysis On the basis of: The materials used. The modus operandi of analysis – i.e., the method of operation followed in the analysis. Types of Financial Analysis On the basis of materials used: External analysis. Internal analysis. Types of Financial Analysis On the basis of materials used: External analysis. • This analysis is done by outsiders who do not have access to the detailed internal accounting records of the business firm. (Investors, creditors, government agencies, credit agencies and general public.) Types of Financial Analysis On the basis of materials used: Internal analysis. • This analysis is conducted by persons who have access to the internal accounting records of a business firm. (Executives and employees of the organization and government agencies which have statutory powers...
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...1. EXECUTIVE SUMMARY Financial analysis is the starting point for making plans, before using any sophisticated forecasting and planning procedures. Understanding the past is a prerequisite for anticipating the future. Financial analysis is the process of identifying the financial strength and weakness of the firm by properly establishing relationship between the items of the balance sheet and the profit and loss account. Financial analysis can be undertaken by management of the firm, or by parties outside the firm, viz. owners, creditors, investors and others. The nature of analysis will differ depending on the purpose of the analyst. 1. Investors: Who invested their money in the firm’s shares, are most concerned about the firm’s earnings. They more confidence in those firm’s that show steady growth in earnings. As such, they concentrate on the analysis of the firm’s present and future profitability. They are also interested in the firm’s financial structure to that extent influence the firm’s earning ability and risk. 2. Trade creditors and financial institution: they are interested in firm’s ability to meet their claims over a very short period of time. Their analysis will, therefore, confine to the evolution of the firms liquidity position. And the financial institutions are interested in the financial statements of the borrowing concern to ascertain its short- term as well as long-term solvency and also it profitability. 3. Suppliers: On the other hand, are concerned...
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...Accounting and Finance for Managers LESSON 7 FUND FLOW STATEMENT ANALYSIS CONTENTS 7.0 7.1 Aims and Objectives Introduction Meaning & Objectives of Fund Flow Statement Analysis Methods of Preparing Fund Flow Statement 7.3.1 Schedule of Changes in Working Capital 7.3.2 Net Profit Method 7.3.3 Sales Method 7.3.4 First Method 7.3.5 Second Method 7.4 Advantages of Preparing Fund Flow Statement 7.4.1 Illustrative Statement of Financing 7.4.2 To fulfil the Primary Objective of the Financial Management 7.4.3 Facilitation through Financial Planning 7.4.4 Guide to Working Capital Management 7.4.5 Indicator of Yester Track Path of the Firm 7.5 Let us Sum up 7.6 Lesson-end Activity 7.7 Keywords 7.8 Questions for Discussion 7.9 Suggested Readings 7.0 AIMS AND OBJECTIVES In this lesson we shall discuss about fund flow statement analysis. After going through this lesson you will be able...
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...A REPORT OF PROJECT ON FINANCIAL STATEMENT ANALYSIS IN MANGALORE REFINARY AND PETROCHEMICALS LIMITED Under the guidance of Internal Guide Ms.Ramya.R Management and commerce department Amrita School of Arts and Sciences Mysore Extrnal Guide Alpana Dosaj Finance Department Mangalore Refinery and Petrochemicals Limited Mangalore SUBMITTED TO MANAGEMENT AND COMMERCE DEPARTMENT AMRITA SCHOOL OF ARTS AND SCIENCES MYSORE Submitted By: D Ravi Thirumaleshwara Sharma MY.BU.U3BBM09019 BBM 5TH SEM Amrita School of Arts and Sciences Mysore FINANCIAL STATEMENT ANLYSIS OF MRPL Page 1 ACKNOWLEDGEMENT I have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals and organizations. I would like to extend my sincere thanks to all of them. I am highly indebted to M/S. ALPANA DOSAJ for their guidance and constant supervision as well as for providing necessary information regarding the project & also for their support in completing the project. My deepest thanks to Lecturer, M/S RAMYA. R the Guide of the project for guiding and correcting various documents of mine with attention and care. She has taken pain to go through the project and make necessary correction as and when needed. I express my thanks to the Principal M/S VIDYA PAI, AMRITA SCHOOL OF ARTS AND SCIENCES, for extending his support. My deep sense of gratitude to Mr. RAMAN TRAINING CHIEF, Mr. JOSE DGM OF TRAINING DEPARTMENT OF MANGALORE REFINERY...
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...alternative investments if they differ in size. To adjust for the size, or scale, problem, the standard deviation can be divided by the expected return to compute the coefficient of variation (CV) – a measure of “risk per unit of expected return.” Investor’s Attitude towards Risk Investors have different attitudes while deciding between the risk and return in an investment. Investors are, by and large, risk averse. This implies that they demand a higher expected return, the higher the risk. The expected return from a portfolio The expected return from a portfolio (or group) of investments is simply a weighted average of the expected returns of the securities comprising that portfolio. The weights are equal to the proportion of total funds invested in each security. (The weights must sum to 100 percent.) Covariance The covariance of the possible returns of two securities is a measure of the extent to which they are expected to vary together rather than independently of each other. For a large portfolio, total variance and, hence, standard deviation depend primarily on the weighted covariances among...
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...that first. Statement of Cash Flow There have been instances where people have tended to bleeding wounds, only to find that the victim died from, say, a blocked air passage. Many things are essential to life, but in the short term, nothing is more important than breathing, in that an absence creates the most immediate life threatening "crisis". Cash as Breath of a Business Anyone running a business should think of cash as breath. Cash, in a broad sense, means a positive bank account or the access to a credit line. Another way of thinking: "If I write a check, will the bank cash it"? The Role of Cash in a Business The Role of Cash in a Business Cash as Breath of a Business (Cont’d) Cash as Breath of a Business (Cont’d) When a business loses access to funds, suppliers stop shipping and workers stop showing up at work. Inevitably a creditor will take steps to put the firm in receivership, at which point the owners have legally lost the ability to operate the business. A company going into receivership is normally broken up: assets are sold, often at a steep discount, to recover funds to payoff creditors. The management of a business sometimes may be so focused on longerterm issues: (1) bringing a new product to market (2) working with an existing customer (3) attracting new investors They might lose sight of the short-term cash position of the company, and the company went into bankruptcy. One key purpose of cash flow analysis is to predict...
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...and analysis, basic financial statements, required supplementary information other than MD&A, combining and individual fund statements, narrative explanations, and statistical section. Answer: True 2. The three major sections of a CAFR are the Introductory, Financial, and Statistical sections. Answer: True 3. The introductory and statistical sections of a CAFR are required to be audited. Answer: False 4. State and local governments are not required to prepare a CAFR. Answer: True 5. Combining statements are required whenever a non-major column is used in one of the fund financial statements. Answer: True 6. A complete CAFR includes combining financial statements to reflect major funds. Answer: True 7. In addition to the government-wide statements, governments are required to prepare fund financial statements for governmental, proprietary and fiduciary funds. Answer: True 8. In addition to the government-wide statements, governments are required to prepare fund financial statements for governmental funds only. Answer: False 9. The General Fund is not always considered to be a major fund when preparing fund basis financial statements. Answer: False 10. With respect to fund basis financial statements, governmental funds are considered to be a major fund when total assets, liabilities, revenues and expenditures combined are at least 10% of the total for the governmental funds category...
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...steps: a. Determine the specific financing requirements of the project with respect to types and cost of the assets to be acquired. b. Identify the alternative sources of financing including the terms and conditions, the effective cost, and the maximum amount of financing from each source. c. Ascertain the desirable debt-equity ratio, the relationship between the financing that can be obtained from creditors and financing that can be provided by stockholders. d. Establish the project’s financial policy. MAJOR PARTS OF FINANCIAL STUDY The major parts of financial study are (1) statement of assumptions, (2) projected financial statements, (3) possible sources of outside financing, (4) details of various amounts contained in the projected financial statements, and (5) analysis of financial projections. STATEMENT OF ASSUMPTIONS Assumptions are plain statements about the possible future behaviour of certain factors affecting a project. They provide specific basis in the preparation of financial projections if actual data are not available. This absence or unavailability of actual data necessities making of valid assumptions-reasonable and...
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...| | | | | | | | | | | | | | TERM PAPER ON Financial analysis of L&T Info-tech [pic] SUBMITTED TO: SUBMITTED BY: Ms. Shelly Mam Rajwinder nijjar Reg no. 11002347 Roll no. B39 ACKNOWLEDGEMENT I am thankful to Ms. Shelly mam who provided me with the opportunity and guided me in successful completion of my term paper. Under her valuable guidance, constant interest and encouragement, who have devoted their ever-precious time from their busy schedule and helped me in completing the term paper. Special, continual assistance while completing the term paper was provided by the friends. I wish to acknowledge my special thanks to them for their help and cooperation in order to complete this project. I am also thankful to those who have helped me intellectually in preparation of this term paper directly or indirectly. I am deeply indebted to the various sources of information from relevant sites from internet and books. TABLE OF CONTENTS |SR. NO. |PARTICULARS |PAGE NO. | | 1. |Introduction to company L&T Info-tech |4 | |2. |Balance sheet of the company |4-5 ...
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...Discuss the importance of the statement of cash flow. Discuss the decisions that are made based upon this information. Statement of cash flow reports sources and uses of cash for an entity and provide an entry for the cash balance shown on your balance sheet. Also statement of cash flow knows where the cash comes from is important in projecting whether cash will be generated from those sources in the future. In addition it also must knowing where the cash goes is important in assessing the organization’s future cash needs. The decisions that are made based upon this information: Is the company generating enough cash from normal operations to continue operating and to make required payments to creditors? Will the company generate sufficient cash for future expansion? Is the company generating sufficient cash to pay future dividends? The purpose of the statement of cash flows is to provide an entry for the cash balance shown on your balance sheet. The statement of cash flows is divided into three specific areas: cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities. Let's take a quick look at each, hopefully you will then be able to differentiate which area your will tell you the most about the health of your business, or if just one area can provide that much information. The area of cash flows from operating activities is the meat and potatoes of the statement of cash flows. This area will show you if...
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...answers in spaces provided in this Student Guide TASK You will need to write a report outlining the following: * What methods would you use to plan for financial management including: * What you would analyse in order to find information on previous profit/loss? * How would investigate the reasons for previous profit/loss? * How would you analyse identify future expenses etc…? * How would you analyse cash flow trends? * What requirements might you have in relation to taxation? * What types of software might you need for financial management? * Then discuss the steps involved in creating a budget: * Then you will need to discuss the methods you will use to implement a budget including: * Circulation methods * Risk management * Review methods * Contingencies * Tracking * Compliance and statutory requirements * Identifying types discrepancies ANSWER SHEET (Expandable) Financial managementFinancial management is broadly concerned with the acquisition and use of funds by a business firm. In other words, FM is planning, directing, monitoring, organizing, and controlling of the monetary resources of an organization. FM scope may be defined in terms of the following questions:1. How large should the firm be and how fast should it grow? 2. What should be the composition of the firm’s assets? 3. What should be the mix of the firm’s financing?4. How should the firm analyze, plan, and control its financial...
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...Investment Fund and Security Analysis Assignment Question 1 There are several examples of the various types of mutual funds. In fact the list is listless but the most common ones include; Aggressive growth funds, Growth funds, Growth and Income Funds, Value Funds, International Equity Funds, US Government Income Funds, Municipal Bond Funds, Corporate Bond Funds, High Yield Bond Funds, Treasury Bills, Money Market Funds among many more. Load Mutual Funds are funds that have a sales charge or commission attached when they are purchased. The charge is used to compensate or pay for the services of the intermediary their time and expertise in selecting the appropriate mutual fund. Such charge is either paid while buying the funds or when selling them. On the other hand, No-Load Mutual Funds are either purchased directly or indirectly through a mutual fund company. These funds may have a small 12b-1 fee i.e. the cost of distribution which is incorporated into the fund as expense ratio. The expense ratio is paid by the shareholder of the fund on Daily basis through reduction of the price of the fund. Most investors prefer no-load funds since there is no more expenses required to pay for the broker services. Question 2 There are several types of mutual funds and they include the following; Stock Funds Stock Funds are at times referred as equity funds is a fund that invests in stocks which at times are also known as equity securities. These types of fund mainly consist of stock though...
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...in which it made several recommendations the principle one being the institution of provisional co-operative banks to save as apex bank in the hierarchy in India is based upon the findings of this report. In 1919 the Montague Chelmsford Act made co-operation a provincial subject. Since then all the state government passed their own separate co-operative societies act. The co-operative banking structure in India may be divided in three parts. - A) Primary Co-operative Credit Societies. B) Central Co-operative Bank. C) State Co-operative Bank. A) Primary Co-operative Credit Societies:- The primary co-operative credit society is an association of borrowers and non-borrowers residing in a particular loyalty. The funds of society are derived from the share capital & deposits of members and loan some central co-operative bank. The borrowing power of the members as well as of the society is fixed. The loans are given to members for the proposed of the cattle, fodder, fertilizers and practices etc. (B) Central Co-operative Bank. These are the federation of primary credit...
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...TO: Go With the Flow Inc. FROM: Olivia Bogle, Laura Cox, J.T. Mack, and Erica Patterson RE: Statement of Cash Flows Background Go With the Flow Inc. (Go With the Flow) designs, manufactures, and sells a large variety of mobile network and communication products. The company’s communication devices include mobile, cordless, and corded telephones. Go With the Flow’s liquidity primarily comes from the company’s cash flows, debt and revolving credit facilities, and the sale of trade accounts receivables. Three of the company’s cash flow transactions are insurance settlement proceeds, sale of accounts receivable, and acquisition of property, plant, and equipment on account. This memo will analyze each transaction under Financial Account Standards Board’s (FASB) Accounting Standards Codification (ASC) 230, Statement of Cash Flows. This memo will also appropriately classify each transaction and discuss any timing issues related to the Statement of Cash Flows. Insurance Settlement Proceeds Issue What is the proper classification for the statement of cash flows related to insurance proceeds? Analysis A tornado destroyed one of the company’s manufacturing facilities, in turn; Go With the Flow received a $20 million settlement from an insurance carrier in the current year. The company decided not to rebuild the facility, instead, they will use the insurance proceeds to fund a defined-benefit pension plan. According to ASC 230-10-45-12, directly related insurance...
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...more than 80 years Maricopa County’s community has used their caring power to address human care needs. In 2005 Valley of the Sun United Way Foundation was organized to help engage in activities for the benefit of the VSUW. Each fall VSUW conducts a campaign that helps to offset the following year. Along with the campaign contribution there are three options for donors. The first is the Results That Matter Fund that is invested into health and human services programs, the second is the Impact Areas that identify the community needs, and third is a specific nonprofit agency or program. Cash flow and functional expenses are exampled at in all nonprofits and profit organizations. To identify properly the organizations’ strengths, weaknesses, and areas of threat the internal and external factors must first be analysis. An audit was conducted for 2008 and 2009 in accordance with the Government Auditing Standards. This audit was conducted to make sure that the statements are free of material misstatement. VSUW reported a combined statement of financial position statement for two years, 2008 and 2009 with the end of the fiscal year being June 30. Beginning with their current assets, cash and cash equivalents between 2008 and 2009, they are showing an increase of more than two million dollars has occurred. The reports showed that the contributions or pledges have decreased in 2009 showing a decline in the total current assets in 2009 from the previous year, there has also been...
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