Financial statements are mainly prepared for decision making purposes. But the information as is provided in the financial statements is not adequately helpful in drawing a meaningful conclusion. Thus, an effective analysis of financial statements is required. This process of critical evaluation of the financial information contained in the financial statements in order to understand and …
Ratio Analysis describes the significant relationship which exists between various items of a balance sheet and a statement of profit and loss of a firm. Ratios provide clues to the financial position of a concern. It enables to assess the profitability, solvency and efficiency of an enterprise. Types of Ratios: There is a two way classification of ratios: …
Accounting is the systematic and comprehensive recording of financial transactions pertaining to a business. According to Bierman and Drebin:” Accounting may be defined as identifying, measuring, recording and communicating of financial information.” Accounting can also be defined as the process of identifying, measuring, recording and communicating the required information relating to the economic events of an …
Any type of business or occupation requires money at every stages of its operation. Whether it is a small business or large, manufacturing or trading or transportation business, money is an essential requirement for every activity. Money required for carrying out business activities is called business finance. Finance is needed to establish a business, to run it, to …
Every Company makes investment in fixed and current assets. Fixed assets like e.g., plant and machinery, land and building, vehicles, etc, remains in the business for more than one year. On the other hand, Current assets like inventories, debtors, bills receivables, etc. get converted into cash or cash equivalents within one year. Some part of these, current assets …
