Analysis of Financial statement For Class 12th
Author: B. S. Grewal
Offer: Rent at ₹121 or Buy at ₹345
Analysis of financial statements is a systematic process of analyzing the financial information in the financial statements to understand and take economic decisions. Tools or techniques of financial statements analysis: Comparative statements - mean a comparative study of individual items or components of financial statements i.e. Balance sheet and statements of profit and loss of two or more years of the enterprise itself. Common- Size statements - means statements in which individual items of financial statements in which individual items of financial statements of two or more year are placed side by side and there after converted into percentage taking a common base. Ratio Analysis - is an arithmetic expression of relationship between two related or interdependent components of financial statements of an accounting period. Cash flow statements - statements showing flow of cash and cash equivalents during the accounting period classified as operating activity, investing activity and financing activities. Uses of financial Statements: Securities Analysis: it is a process by which the investor comes to know whether the firm is fulfilling his expectations with regard to payment...
