Financial Statement Analysis Assignment Help
The most intricate and essential part of any business organization is Finance and consequently, the profession of finance requires specialized training and education. Though there a few portals providing educational assistance online, the most prominent and reputed out of all these is TotalAssignmentHelp.com providing Financial Statement Analysis Assignment Help. The experts at TotalAssignmentHelp.com can provide you expert assistance in Financial Statement Analysis Assignments as we as essays and other projects.
Financial Statement Analysis
Financial Statement analysis, also otherwise known as financial analysis is a [process that refers to analyzing the financial statements of an organization with the objective of ascertaining the financial situation of a business and thereafter making informed decisions regarding the business based on sound financial information. Financial Statement Analysis Assignment Help experts explain that for the purpose of preparing the analysis of the financial statement their financial statements prepared by the accounts departments of the company are collected and thereafter evaluated on the basis of certain rules, guidelines and principles with the objective of squeezing out certain pertinent information so that effective and precise conclusions can be drawn. Once the reports are prepared with all the relevant information, they are submitted to the higher management who utilize them to make valuable business decisions.
As per experts providing Financial Statement Analysis Assignment Help, financial statement based reports generally lead to the following decisions.
- Deciding as to whether they should or should not continue with the business.
- Purchasing related decisions, such as purchasing of raw materials.
- Decisions regarding capital expenditure and revenue expenditure.
- Decisions regarding acquisition of loans and equity.
- Decisions pertaining to investments and lending out money.
There we can safely conclude that financial statement analysis allows the business concern to make efficient decisions regarding the operations of the business and decide important factors that could govern the course of the business concern. Therefore it would be understatement to say that Financial Statement Analysis is a complicated topic that requires expert assistance in case you are pursuing the subject and are required to prepare financial statement analysis assignments for which you would require Financial Statement Analysis Assignment Help.
What Constitutes a Financial Statement?
There are basically three statements that are prepared for the shareholders as well as the management, in order to ascertain the financial position of the organization. There statements include the following:
- Income Statement: Financial Statement Analysis Assignment Help specialists explain that this statement serves the purpose of enumerating all the sources of incomes as well as all the expenses incurred and then listing the Net profit for the financial year earned by the business concern. Numerically, net Profit is expressed as
Net Profit = Total Revenue – Total Expenses
- The accountant first of all calculates the Gross Profit by subtracting the total cost of goods sold from the total income from sale of gods or services. Another amount that is deducted from the income is the direct expenses. Once these deductions are made, what is left behind is the gross profit.
- Out of the gross profit the accountant shall have to subtract the taxes that are payable, as well as all other different indirect expenses, and the remainder will be the net profit.
- More information on this topic can be achieved by taking Financial Statement Analysis Assignment Help from TotalAssignmentHelp.com
- Cash Flow Statement: The flow of cash, to and fro the company is represented in the cash flow statement. Cash flow statement comprises of three sections:
- The cash utilized for the purpose of carrying out the operations of a business concern, represented through operating activities.
- The revenue generated through the issuance of company’s equity and other financial instruments for sale, represented by financial activities.
- Investment Activities represent the investments of the company and essentially the money used towards it.
- Balance Sheet: Financial Statement Analysis Assignment Help experts explain that the balance sheet is a like a summarized view of the financial position of a business concern where the annual position of all the assets and liabilities of the business are displayed at their current value. Balance sheet comprises of the following item categories.
- Assets: They include any moveable or immovable property of the business concern.Liabilities: There are the obligations that a business has towards different individuals and groups associated with it.
- Owner’s Equity: The capital Invested buy the owner into the business as well as the interest accrued on this capital if any.
- The following equation explained by our experts providing Financial Statement Analysis Assignment Help, clearly demonstrates the concept of balance sheets.
- Assets = Liabilities – Owner’s Capital [Capital + Revenue - (Expenses + Treasury Stock + Dividends)]
- What is imperative in a good and well prepared Analysis of Financial Statements is the presence of notes describing the components and figures that are enumerated in the financial statements as well as the conclusions that are drawn from these statements. These notes help in evaluating the financial position of the business as well as help in evaluating the economic viability of various activities that are carried on in the business concern.
Financial Analysis Major Objectives
The specialists of Financial Statement Analysis Assignment Help suggest that the purpose of analyzing financial statements is to achieve four major objectives which are listed as follows:
- Profitability: The first and primary objective of financial Statement analysis is to ascertain if a business concern is able to do what is the main objective of a business and that is to earn profit. Financial Statement Analysis Assignment Help experts explain that a company or a business is an economic entity that carries out its operations with the intention of obtaining profit. This is the most important purpose of preparing Financial Statement Analysis reports as it helps to ascertain if this important business goal is being reached or not.
- Solvency: The second objective is to ascertain if the company is earning enough profit to set off its long term liabilities over the course of its life.
- Liquidity: The third objective of preparing analyzing financial statements is to ascertain the liquidity of a business concern which refers to the capability of a business to meet its short term obligations. This also allows the investors of business to evaluate if the business’s economic health is sound or not.
- As per the specialists providing Financial Statement Analysis Assignment Help at TotalAssignmentHelp.com investors are interested in bath the liquidity as well as the solvency of a business concern. What they look out for is a good Debt to equity ratio, which should ideally be in favor of equity.
- Stability: The position or situation of a business to remain in operation for a long time and not having to incur huge losses is called stability.
Financial Analysis Methodologies
The analysis of ratios in relation to finance is a key method for analyzing the financial statements of a business that eventually give out relevant financial information. While analyzing two separate financial values that have a direct bearing on each other are when compared to each other, the ratio is called a financial ratio. These ratios are obtained from the various components of the financial statement of a business. There are certain important financial ratios that have great bearing on the decision making of various parties associated to a business as these ratios are a clear and in depth representation of various aspects of accompany. Financial Statement Analysis Assignment Help specialists at TotalAssignmentHelp.com have listed the following to be the most important financial Ratios.
- Profitability ratio = A ratio of Gross Profit earned to the Net Sales managed by a company
- Profit Margin = A ratio of the Net Profit earned which is the gross profit minus the indirect expenses to the Net Sales of a business
- Liquidity ratio = A ratio of the Current Assets in comparison to the Current Liabilities
- Quick Liquidity ratio = A ratio of the Current Assets minus the stock inventory in comparison to the Liabilities of a company at present
- Debt ratio = A ratio representing the total amount of debt owed as opposed to the Total assets of a business concern
- Earnings per share = A ratio of the average earnings for every share
As per the experts providing Financial Statement Analysis Assignment Help, these are some of the most common and most important financial ratios that are utilized to analyze and evaluate the financial position of a business concern and help different parties ascertain their interest in the business. Though it must be noted that these are not all the ratios that are used and there are several other ratios that play an important part in financial statement analysis.
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