Analysis Of Financial Statement Analysis

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A MINI RESEARCH PROJECT
ON “FINANCIAL STATEMENT ANALYSIS OF
“ION EXCHANGE”

“FINANCIAL STATEMENT ANALYSIS OF ION EXCHANGE”
INTRODUCTION TO FINANCIAL STATEMENTS
A Financial statement is a collection of data organized according to logical and consistent accounting procedures. Its purpose is to convey an understanding of some financial aspects of a business firm. It may show a position at the movement in time, as in the case of balance sheet, or may reveal a series of activities over a given period in time, as in the case of income statement.
Financial statements are outcome of summarizing process of accounting. In other words John Number “ The financial statements provide summery of accounts of a business enterprise, the balance …show more content…

A number of methods or devices are used to study the relationship between different statements. An effort is made to use those devices which clearly analyze the position of the enterprise. The following are the methods of analysis are generally used.
1. Ratio analysis
2. Comparative statements
3. Common size statements
1. Ratio Analysis:
Ratio analysis is a widely used tool of financial analysis. It can be used to compare the risk and return relationship of firms of different sizes. It is defined as the systematic use of ratio to interpret the financial statements so that the strengths and weaknesses of a firm as well as its historical performance and current financial condition can be determined. Ratio analysis is the calculation and comparison of ratios, which are derived from information of a company’s financial statements. The level and historical trends of these ratios can be used to make inferences about a company’s financial conditions, its operations and attractiveness as an

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