In our present day economy, FINANCE is defined as the provision of money at the time when it is required. Every enterprise, whether big, medium of small, needs finance to carry on its operations and to achieve its targets.
Finance is so indispensable today that it is the lifeblood of an enterprise. Without adequate finance, no enterprise can possibly accomplish its objectives.
Finance is the life blood and the nervous system of any business organization. Just as circulation of blood, is necessary in the human body to maintain life. Finance is necessary in the business org. for smooth running of the business.
Financial management involves managerial activities concerned with the procurement and utilization of funds for business purpose the finance function does with procurement of money taking in to consideration of today's as well as future need and its effective utilization. Since finance is required to purchase of machinery and raw materials, to pay salaries and wages also for day-to-day expenses.
According to the American Institute of certified public accountants: Financial statement reflect a comparison of facts, accounting conventions and personnel judgments and conventions applied affects the materially.
[...] MEANING OF RESEARCH DESIGN The formidable problem that follows the task of defining the research problem is the preparation of design of the research project, popularly known as the research design, decision regarding what, where, when, how much, by what means concerning an inquiry of a research study constitute a research design. A research design is the arrangement of conditions for collection and analysis of data in a manager that aims to combine for collection and analysis of data relevance to the research purpose with economy in procedure. [...]
[...] Comparative statements can be prepared for both types of financial statement balance sheet as well as profit and loss account COMPARATIVE BALANCE SHEET: The comparative balance sheet analysis is the study of the trend of the same items, group of items and computed items in two o more balance business enterprise on different dates. The change in period balance sheet items reflect the conduct of a business. The changes in periodic balance sheet items reflect the conduct of a business. [...]
[...] It is the financial statement, which presents the revenue and expenditure of a company during an accounting period and shows the excess of revenue over expenses and vice versa. It is generally considered to be the most useful of all financial statements. BALANCE SHEET Balance sheet may be defined as statement of financial position of an enterprise to a given date, which exhibits its assets, liabilities, capital reserves and other account balances at their respective book value”. So the balance sheet represents all assets owned by the business at a particular moment of time and the claims of the owners and the outsiders against those assets at that time. [...]
[...] The purpose of financial analysis is to diagnose the information contained in financial statements so as to judge the profitability and financial soundness of the firm. Financial annalist analyses the financial statements with various tools of analysis before commanding upon the financial health of the firm. Need of financial statements diagnose the information contain in financial statement. So as to judge the profitability and financial position of the firm. TYPES OF FINANCIAL STATEMENTS ANALYSIS: ACCORDING TO MATERIAL USED: 1. External Analysis: External analysis of financial statements is made by those who do not have access to the detailed accounting records of the company i.e., banks, creditors and general public those people depend almost entirely on published financial statements. [...]
[...] An analysis of the ratios over the past few years may well suggested the trend or direction in which the concern is going upward and downward Ratio Analysis: Ratio analysis is an important and widely used tool of analysis of financial statements. It is essentially an attempt to develop meaningful relationship between individual item in the balance sheet or profit and loss account. The objective and utility of ratio analysis as a technique of financial analysis is confined not only to the internal parties but to the credit suppliers, banks and money lending institutions also. [...]
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