Financial performance analysis is the process of identifying the financial strengths weaknesses of the firm by properly establishing the relationship between the item of balance sheet and profit and loss account. It also helps in short-term and long term forecasting and growth can be identified with the help of financial performance analysis. The directory meaning of analysis is to resolve or separate a thing in to its element or components parts for tracing their relation to the things as whole and to each other. The analysis of financial statement is a process of evaluating the relationship between the components parts of financial statement to obtain a better understanding of the firms position and performance. This
An empirical study on financial planning behavior across income profiles. Abstract:- Financial Planning is a continuing process to make pragmatic decisions about money that can help accomplish goals in life. ‘Financial Planning Behavior', can be elaborated as application of psychological aspects to financial planning decision-making, it has become a much discussed subject in recent times. Financial Planning is done to manage income more efficiently, to identify investment opportunities relevant to financial situation, to provide family's financial security, etc. The study scrutinizes the financial planning behavior across various income sections based on a research conducted by interviewing professionals belonging to various income categories.
Relating this to B.A, this organisation has a budget as it is a process of preparing financial reports which are expected in the present and future. Budgeting sets a guideline for how much money this business can spend on their physical resources such as office tools and more in the present and future. By doing this, the business is saving money and time and there are
Financial ratio analysis helps management (1) maintain sufficient working capital to support operations; (2) project how changes in sales, costs, prices and so on will affect capital needs and profits; (3) analyze management performance; and (4) measure the profitability of company units, products and departments. From a management perspective, the rationale for use of financial ratio analysis is that by expressing several figures from financial statements as ratios, information will be revealed that is missed when the individual numbers are observed. The theory is that managers can then use this information to improve the efficiency and profitability of their operation. Associated with this theory is the implicit assumption that information from ratio analysis, especially trend analysis, enables management to foresee and possibly avoid business failure (Thomas III and Evanson, 2006). Several practitioner-oriented publications suggest that financial ratios do not vary with firm size within an industry (Westwick 1987 and Centre for Interfirm Comparison 1977).
By looking at the previous research, it was found that financial literacy is defined differently by every researcher. Financial literacy is the ability of a person to manage financial resources effectively for a lifetime of financial well-being by using his or her knowledge and skills (The United States Financial Literacy and Education Commission, 2007). Lusardi (2008) mentioned that financial literacy is the knowledge of basic financial concepts such as the working of compounding interest, the difference between nominal and real values and the basic risk diversification. According to Mason and Wilson (2000), financial literacy is a process of meaning-making in which individuals use combination of skills, resources and contextual knowledge in order to process information and to make decisions based on the knowledge on financial consequences of that decision. Financial literacy is used to measure how well an individual can understand and use personal finance-related information in life (Huston, 2010).
The intersection of money supply and demand on the graph determines the equilibrium interest rate. This interest rate is set by the Central Bank to match the amount of money that public wants to hold. Additionally, at this interest rate, the money supply and demand will equalize. Determination of interest rate The change in demand and supply for money will affect interest rate. There are three different cases with different assumptions to depict the determination of interest rate.
Now Finance companies help these small companies to meet their running expenses using Receivables Finance. Also known as invoice discounting or factoring, this form of financing has helped business of varied sizes to bridge the cash flow gaps by borrowing funds based on the accrued receivable value,
It encompasses diverse fields such as financial accounting, cost accounting, budgetary control and inventory control. These are explained in brief below: • Financial Accounting: Financial accounting provides information to the stakeholders by preparing financial statements. In preparing, analysing and communicating such information, management accountants collecttake information from financial statements and supply relevant, accurate and timely information to managers that aid them in making decisions. • Cost Accounting: Cost accounting includes the preparation of budgets, comparing and analysing the variances, setting up the selling price of a product by taking into consideration all cost variants and measuring the profitability of the product or a project. Managers use cost accounting to support decision-making to cut a company’s costs and improve profitability.
It comprises forecasting revenue levels and expenses, the organisations profit capital expenditure, cash flows, and gives management a framework for control. A budget therefore has multiple purposes. It is a financial management tool that ensures prudent allocation of an organisation’s financial resources. Budgets help organisations keep track of the progress the organisation is making towards attainment of its strategic goals and objectives. It assists the organisation forecast profits and future cash flows and can be used as its road
Comparative Financial Statement analysis provides information to assess the direction of change in the business. Financial statements are presented as on a particular date for a particular period. The financial statement Balance Sheet indicates the financial position as at the end of an accounting period and the financial statement Income Statement shows the operating and non-operating results for a period. But financial managers and top management are also interested in knowing whether the business is moving in a favorable or an unfavorable direction. For this purpose, figures of current year have to be compared with those of the previous years.