COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, WAH CANTT.

FINANCIAL STATEMENT ANALYSIS

Assignment: 02

SUBMITTED BY: M. Taimur 011 Adnan Ahmed 006 Andrew David 005 M. Wajahat Liaqat 015

SUBMITTED TO: Shahab-Ud-Din

1.

What Is Accounting Analysis? Explain.

Accounting Analysis
It is the best way to measure the value of the behavior. You can select the quantity and the driver of the cost and classifies each account of the accounting in fixed or variable costs. The value, and then consider the cost of each account and the cost estimates for the variable cost per unit of value or the printer driver, the journal has a fixed cost. Calculate the analysis assumes a detailed analysis of the data, suspected to be in the hands of the experts-accountants and of the council 2. Describe The Business Analysis And Identify Its Objectives?

Analysis of the activity analysis of the business is the discipline in order to identify the needs in the field of entrepreneurship and the search for solutions to the problems your business. In many cases, the solutions include the development of systems, but also perhaps in the process improve the organizational changes or strategic planning and policy formulation in the field of development. Objectives For Business analysis purpose, business versus system analysis From strategies point of view to understand organization strength and weakness, its performance and operation capacity. As a project approach analysis to studies of different project their relationship and cash flow. Understanding the situation regarding business problems, definition of the problem and investigation technique. As a business perspective considering stack holder and business policies. As a analysis of business modelling and business activities. Consolidating perspectives and business activity models.

 Indentifying best available solution for any end to end problem. Indentifying gap between current and desire situation. 3. What Is The Fundamental Analysis? What Are Main Objectives?

Fundamental analysis Fundamental analysis is to use real data to assess the value of the security. Although most analysts use fundamental analysis for the evaluation of stocks, this method of assessment can be used for any type of security. One of the most famous and the fundamental analysts, Oracle Objectives Objectives of the fundamental analysis is the screen and the classification of stocks and other financial assets in terms of quality of the investment and the expected impact, and aid for the expectations of the economy and industry group of the forecast earnings, dividends and the values of the own society. 4. Describe The Financial Statement Analysis and Identify Its Objectives?

An analysis of financial reports analysis of financial reports is the process of examining the relationship between the elements and the financial statements for the purposes of comparison with the corresponding information. It is a valuable tool used by investors and creditors, financial analysts, and the other in their decision-making process associated with the stocks, bonds and other financial instruments. Objectives
For the calculation and interpretation of financial reasons, what could be more

useful in the long-term creditors.

utility in the short term creditor.

 For the calculation and interpretation of financial reasons, what could be more useful that the heading common and shared values. To prepare and interpret financial statements in comparative size and general form. 5. Distinguish Between Short-Term And Long-Term Accruals?

The interest can be classified as short-term and long-term assets, or liabilities. The criteria used to classify the accrued interest in the short term or long-term, is the same as for any other active or passive.

6.

Explain How Accounting Standards Are Established?

Accounting standards necessary to ensure that the financial statement, with fairness and compliance with describes the financial results. Without standards, the users of financial statements will need to familiarize themselves with the accounting rules for each company, and the comparisons between companies will be difficult. In the accounting standards used today are known as generally accepted accounting principles (GAAP). 7. How Financial Statements Reflect The Business Activities Of A Company?

Financial Statements of the company are their economic status, and are the main source of information in respect of third parties on their activities, it is therefore important to know the different types of states with the elements, the describes.

8.

Identify And Describe At Least Four Categories Of Financial Analysis

Tools? Growth Ratios The growth may give an idea of the speed with which your business evolves. For example, such a type growth rate is the proportion of sales, which is comparable to the pending sale of the previous year. Net income takes a percentage increase in sales the step beyond show profits after deduction of the costs of the operation. Ratios of Financial Condition The percentage of the overall financial situation indicates that the financial health enterprise. For example, the relationship between debt and equity capital compares the amount of debt, such as commercial loans, and credit card balances, on the level of its own resources, such as the volume of assets of the company, what you wear. Profitability Rations Rate of profitability as well as to demonstrate the value of your business in each of the areas of activity, and the gross profit margin indicates, such as sales, compared to the cost of goods sold. Liquidity Ratio And the liquidity ratio is the comparison between the assets and liabilities that is a measure of your company in compliance with the obligations in the short term. Cross Sectional Analysis It is used to compare and analysis organization financial performance with other organization that exit within same industry and market.

Time series Analysis In this method relationship between different parts of balance sheet is establish by comparing these result are prepare. It includes comparison of same business unit in different year. Comparison of different business units in same year. Cross Sectional Analysis cum times analysis This method is used to compare the financial performance of two or more organization in specific defines accounting period. This method makes it possible to extend the comparison of financial over the year. 10. Identify And Describe Limitations Of Financial Ratio Analysis? Financial States reflect the original cost of account is not necessarily the economic value. Key performance indicators (KPIS) can be manipulated via acceptable changes in accounting methods (for example, the principle of/FIFO). Figures do not take into account the important elements of balance sheet. Analysis of the percentage is based on the data are not economic accounting. Analysis of the proportion is to the study, and does not request the review.