Financial Analysis and
Reporting
What is Financial
Analysis and Reporting?
Financial Analysis & Wants
Reporting
refers to how a business organises Needs
and shares its financial data. This can
include expenses, revenues, cash
flow, profits, and capital. These Savings
reports provide an inside look into the or Debt
financial information of a company.
Financial Analysis & Wants
Reporting
Needs
involves providing stakeholders
with an overview of company
financials. Some of the most common
types of financial statements include Savings
or Debt
the income statement, balance sheet,
and cash flow statement.
Six step process in FAR
Identify purpose of financial analysis
Corporate overview
Financial analysis techniques
Detailed accounting analysis
Comprehensive analysis
Decision or Recommendation
Types of Financial Reporting
Balance Sheet
Income Statement
Cashflow Statement
Income Statement
this particular report tells you how
much money a company made (or lost) in
a given time period (typically a fiscal
year). It does so by showing you revenues
earned and expenses paid, with the
ultimate goal of showing a company’s
profit number.
Balance Sheet
offers a look into a company’s
financial situation at a specific time. It is
the most significant of the four financial
statements. It lists assets, liabilities, and
shareholder equity. Balance sheets help
businesses determine their true net
worth.
Cash Flow Statement
describes how much money a
company makes and spends over a
specific time. It’s based on a
company’s investing, operating, and
financing activities.
Purpose of
Financial Analysis &
Reporting
are documents and records you
out together to track and review how
much money your business is making
(or not).
Purpose of
Financial Analysis &
Reporting
are one of the bedrocks of
modern business. Utilizing financial
data with the help of online data
analysis tools allows you to not only
share vital information both internally
and externally.
Benefits of Financial
Analysis & Reporting
Improved debt management
Trend Identification
Real-time tracking
Liabilities
Progress and Compliance
Cash flow
Communication & data access
Why Is Financial
Analysis & Reporting
Important?
1. For Taxes
2. For Investors & Shareholders
3. For Internal decision-making
4. For Improved internal vision
5. For Ensuring profitability
Why Is Financial
Analysis & Reporting
Important?
6. For Raising capital
7. For Managing financial ratios
8. For Predictive strategies
9. For Lowering risks
10. For Ensuring transparency
Who Uses Financial
Analysis and Reporting
Investors, Shareholders, and Lenders
Business Managers
Regulatory Institutions
Consumers or Customers
Employees
3 Different ways of
Financial Analysis and
Reporting
GAAP (Generally Accepted
Accounting Principles). T
IFRS (International Financial
Reporting Standards)
GDPR (General Data Protection
Regulation)
Internal Uses of
Statement Analysis
Plan - Focus on the assessing the
current and evaluating potential firm
opportunities.
Control - Focus on return on
investment for various assets and
assets efficiency.
Understand - Focus on understanding
how suppliers of funds analyze the firm.
External Uses of
Statement Analysis
Trade Creditors - Focus on the
liquidity of the Firm.
Bondholders- Focus on the long-
term cash flow of the firm.
Shareholders - Focus on the
profitability and long-term health
of the firm.
Company Form of Business
Sole Proprietorship
Partnership
Cooperative Society
Methods of Financial
Statement Analysis
Horizontal Analysis
focuses on each line item as a percentage of
a base figure within a current period, horizontal
analysis reviews and compares changes in the
dollar amounts in a company’s financial
statements over multiple reporting periods. It’s
frequently used in absolute comparisons, but
can be used as percentages, too.
Methods of Financial
Statement Analysis
Vertical Analysis
refers to the method of financial analysis
where each line item is listed as a percentage of
a base figure within the statement. This means
line items on income statements are stated in
percentages of gross sales, instead of in exact
amounts of money, such as dollars.
Thank you!
