Literature review of financial performance analysis

Review for financial performance mba projectuploaded by ijas aslamrelated interestsfinancial ratiostrategic managementintelligence analysisinnovationprofit (accounting)rating and stats1. We seek to identify achievements and limitations of this literature and to highlight areas for further research. Our primary interest is to assess the adequacy of the literature in informing corporate managers how, when, and where to make pro-environment investments that will pay off with financial returns for long-term shareholders. To do so, we create a conceptual framework that maps the influence of regulators, public health scientists, environmental advocates, consumers, employees, and other interested parties upon corporate financial returns. Financial ial analysis is the process of identifying the strengths and weakness of the firm with the help of accounting information provided in the profit and loss account and balance sheet. It is the process of evaluation of relationship between component parts of financial statements to obtain a better understanding of the firm’s position and analysis can also be defined as the yard stick that provides a measure of relationship between two accounting figures.

Review of literature on financial statement analysis

Ratio analysis can be used both in the trend or dynamic analysis and statistical analysis. Financial ratio analysis is the calculation and comparison of ratios which are derived from the information in a company’s financial condition, its operations and attractiveness as an investment. Financial ratios are calculated from one or more pieces of information from a company’s financial statements. In context, however a financial ratio can give a financial analyst an excellent picture of a company’s situation and the trends that are financial performance implications of global sourcing strategy:A contingency analysis. Using a contingency model of global sourcing strategy, this study investigated the moderating effects of sourcing-related factors on the relationship between sourcing strategy and a product's strategic and financial performance. The results lent some support to the contingency model of global sourcing strategy in that product innovation, process innovation and asset specificity were significant moderator variables for financial, but not strategic, performance.

In other words, in achieving high financial performance for a product, whether a particular sourcing strategy should be used for a particular product depended on the levels of product innovation, process innovation and asset specificity. Using longitudinal data on 258 ceos from 118 firms, and controlling for country and industry effects, we found that motives significant predicted both financial performance (tobin's q and the capm) and social responsibility. Ratio analysis is a commonly used analytical tool for verifying the performance of a firm. Indeed, ratio analysis is often criticized on the grounds of subjectivity, that is the analyst must pick and choose ratios in order to assess the overall performance of a this paper we demonstrate that data envelopment analysis (dea) can augment the traditional ratio analysis. We test the null hypothesis that there is no relationship between dea and traditional accounting ratios as measures of performance of a firm. Our results reject the null hypothesis indicating that dea can provide information to analysts that is additional to that provided by traditional ratio analysis.

We also apply dea to the oil and gas industry to demonstrate how financial analysts can employ dea as a complement to ratio up to vote on this titleusefulnot usefulmaster your semester with scribd & the new york timesspecial offer for students: only $4. Dialogthe rest of this title will be available soonliterature review for financial performance mba project will be available on restart ture review for financial performance mba projectuploaded by ijas aslamrelated interestsfinancial ratiostrategic managementintelligence analysisinnovationprofit (accounting)rating and stats1. Dialogthe rest of this title will be available soonliterature review for financial performance mba project will be available on restart error occurred setting your user your browser does not accept cookies, you cannot view this are many reasons why a cookie could not be set correctly. You must disable the application while logging in with your system more about management ial performance ial performance ial performance analysis is the process of identifying the financial strengths and weaknesses of the firm by properly establishing the relationship between the items 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 dictionary 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 analysis of financial statement is a process of evaluating the relationship between the component parts of financial statement to obtain a better understanding of the firm’s position and analysis can be undertaken by management of the firm or by parties outside the namely, owners,creditors, analysis of financial statement represents three major steps:The first step involves the re-organization of the entire financial data contained  the financial statements. Therefore the financial statements are broke down into individual components and re-grouped into few principle elements according to their resemblances and affinities.

This is done through the application tools of financial analysis like ratio analysis, trend analysis, common size balance sheet and comparative balance y, the result obtained by means of application of financial tools is brief financial analysis is the process of selection, relation and evaluation of financial statements. The tools of analysis are used for determining the investment value of the business, credit rating and for testing efficiency of financial analysis helps to highlight the facts and relationships concerning managerial performance, corporate efficiency, financial strength and weakness and credit worthiness of the study the financial performance analysis of “the chennai port trust”. Analyze the financial changes over a period of five analyze the financial statements of the company by using financial evaluate the financial position of the company in terms of solvency, profitability, activity and earning suggest effective measures in the existing system of the ch methodology : research means “know about new things”. This information is already collected and analysis by other and that information is used by others. Balance size balance for the study:financial statement analysis is an important tool for measuring the financial performance of any company. The main aspect of financial management is working capital management and it should be done on day-to-day basis.

This study helps to review the financial performance of the study covers almost the entire area of financial operations covered by “the chennai port trust” the study has been conducted with the help of data obtained from audited financial records. The audited financial records are the company annual reports pertaining to past 5 years from 2004-05 to 2008-2009 and the audited financial records are obtained from the company’s annual report. The researcher tries to measure the performance of the organization and its working capital management in terms of financial tions of the study:The study is restricted for a period of five d that 5 years are a responsible period to get fault accurate es and practices of management of the to the inadequate time it is not possible to analyze all respects relevant to the analysis is based on annual reports of the ities were reluctant to reveal full information about the working of the ial accounting:Financial accounting is the process of systematic recording of the business transactions in the various books of accounts maintained by the organization with the ultimate intention of preparing the financial statement there from. One, profitability statement which indicates the result of operations carried out by the organization during a given period of time and second balance sheet which indicates the state of affairs of the organization at any given point of time in terms of its assets and purpose of financial accounting is to ascertain profit or loss and to indicate financial position of an enterprise. The profit and loss account or income and expenditure account is prepared for a particular period to find out the profitability of the firm and balance sheet is prepared on a particular date to determine the financial position of the ial accounting summaries transactions taking place during a period with the objective of preparing the financial ial performance ial performance analysis is the process of identifying the financial strengths and weaknesses of the firm by properly establishing the relationship between the items 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 dictionary 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.

Financial statement’ refers to formal ad original statements prepared by a business concern to disclose its financial ing to , “the financial statement provides summary of accounts of a business enterprise, the balance sheet reflecting assets, liabilities and capital as on a certain date and the income statement showing the result of operation during a certain period”. Financial statements are prepared with a view to depict the financial position of the concern. The financial statement are prepared periodically that is generally for the accounting term financial statement has been widely used to represent two statements prepared by accountants at the end of specific period. They are :Profit and loss a/c or income e sheet or statement of financial tion of financial statement:Information shown in financial statement is not precise since it is based on practical experience and the conventions and rules developed ial statements do not always disclose the correct financial position of the business concern as they are influenced by the personal opinions,judgement,subjective view and whims of accountant of each e sheet of a concern is a statics document it disclose the financial position of a concern on a particular ation disclosed by profit& loss a/c may not be the real profit as many items shown in the profit & loss a/c may not the ial statements are dumb, because they speak themselves. The statements require further detailed analysis and ial statement of the one period may not be ial statement do not disclose the contribution of man towards the efficiency of the is and interpretation of financial various tools of financial statement are used for decision-making process. The analysis of these statements involves their division according to similar groups and arranged in desired form.

The interpretation involves the explanation of financial facts in a simplifiers ives of analysis and interpretation:The users of financial statement have definite objectives to analysis and interpret . Compare operational efficiency of similar concerns engaged in the same process of financial statement analysis is of different types. The process of analysis is classified on the basis of information used and ‘modus operandi’ of analysis. B) internal analysis (b) vertical tions of financial statement ial statement analysis is a very important device but it has certain limitation which are to be kept in mind. Past cannot be the index of future estimation, forecasting, budgeting and ial statement analysis cannot be a substitute for judgment :Analysis is a tools which can be utilized usefully by an expert may lead to erroneous conclusion by unskilled analysis. Thus the result analysis cannot be considered as judgment or ility of figures:The accuracy and reliability of analysis depends on reliability of figures derived from financial ent interpretation:Result of the analysis may be interpreted differently by different in accounting methods:Analysis will be effective if the figures taken from financial statements comparable.

If there are frequent change in accounting policies and method, figures of different periods will be different and ever rising inflation erodes the value of money in the present day economic situation, which reduces the validity of tions of the tools of analysis:Different techniques of analysis are used by an analyst. It may lead to wrong conclusions and prove harmful to the business s of analysis and analysis and interpretation of financial statement is used to determine the financial position and result of operation as well. The following are the tools that are used for analyzing the financial position of the company:Comparative balance size balance analysis is an important and age-old technique. Use of ratio is to interpret the financial statement so that the strength and weakness of a firm as well as its historical performance and current financial condition can be determined. Ratios are designed show how one number is related to data given in the financial statements are in absolute form and are dumb and are unable to communicate anything. Ratios are relative form of financial data and are very useful technique to check upon the efficiency of a firm.

In fact, analysis of liquidity needs the preparation of cash budgets and cash and fund flow statements; but liquidity ratios, by establishing a relationship between cash and other current asset to current obligations provide a quick measure of liquidity. Hence the earning ratio will be useful to the investors to the value of the shares that is been holding by ative balance sheet:The comparative balance sheet is helpful in analysing and evaluating the financial position of the firm over a period of years. The percentage so calculated can be easily compared with the corresponding percentages in some other ‘trend’ signifies a tendency and as such the review and appraisal of tendency in accounting variables are nothing but the trend analysis. Trend analysis discloses the change in financial and the operating data between specific this:twitterfacebooklike this:like loading...