preview

Financial Statement Analysis Assignment

Good Essays
The purpose of financial statements is to provide data about the financial position, performance and changes in financial position of an organization that is useful to a wide range of users in making economic decisions.

1. Evaluate the Past Performance and Current Position:
Past performance is a good indicator for future performance. As an investor or creditor, they are interested in the past revenues, expenses, net income, cash flow, return on investment and others. These offer a means for judging the past performance of a business and also may indicators of future performance.
Basically, the analysis for current position points out where the business stands currently. For example, the current position table will show the types of assets
…show more content…
As a result, they can make proper portion of credits among different borrowers. Financial state¬ment analysis helps in determining credit risk, and to decide the terms and conditions of a loan, interest rate, maturity date etc.

5. Assessment of the operational efficiency
Financial statement analysis helps to assess to operate the company’s efficiency in managing a company. The current performance of the firm which are revealed in the financial statements can be compared with some standards set earlier and the aberration could be between quality and actual performance can be used as a hint of efficiency of the management.

Question 2
An accountant performs financial functions related to the collection, accuracy, recording, analysis and presentation of a business, organization or company's financial operations. The accountant usually have different roles in a company's operations. In a smaller business, an accountant's role may consist of the main financial data collection, input and report generation. Between, the middle to larger sized companies could use the accountant as a consultant and financial interpreter, who may present the company's financial data to people within and outside of the business. In generally, the accountant can also deal with third parties, such as suppliers, customers and financial
…show more content…
From deciding which kinds of supplies to order, payment of bills to payroll, the accountant handles many intricate financial details on a daily basis. Advising on business operations can include issues, such as revenue and expenditure trends, financial commitments and future revenue expectations. The accountant also analyzes financial data to resolve certain discrepancies and irregularities that may arise. Recommendations may also involve developing efficient resources and procedures, while providing strategic recommendations for specific financial problems or
Get Access