Financial Strength And Weakness Of The Banking System

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1. GENERAL INTRODUCTION Financial statement are prepared primarily for decision making. They play dominant role in setting the framework of managerial decisions. But the information provided in the financial statement is not an end in itself as no meaningful conclusions can be drawn from these statements alone. However, the information provided in the financial statements is of immense use in making decisions through analysis and interpretation of financial statement. Financial analysis is ‘ the process of identifying the financial strength and weaknesses of the firm by properly establishing relationship between th e items of balancesheet and the profit and loss account’. The banking system is an integral of an economy. It is one of the main institution that impings on the economy and effect its performance. Economist have expressed a varity of opinions on the effectiveness of the banking system in promoting facilitating economic development. As an economic institution the bank is expected to be more directly and more positively related to the performance of the economy than most non-economic institutions. Banks are considered to be the never center of the economies and finance of a nation and the barometer of its economic perspective. Banks are important agencies for generation of savings community. The banking system is an integral of an economy. It is one of the main institution that impings on the economy and effect its

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