Objectives of financial analysis company
All business owners and an overwhelming number of top managers and key personnel
are interested to venture in which they invested their money, power and knowledge has been developed successfully and profitably. To achieve this goal, you must have an economically sound management of the company, which is based on a thorough financial analysis.
No event in the business entity does not occur in isolation, but is a cause or effect, a chain of other events. You have to understand the role of events in each situation, determine what occurred relative changes, and identify their causes. Play a variety of situations and circumstances, to investigate them both individually and in combination enables precise tasks of financial analysis of the test entity.
The objectives of financial analysis is the assessment of the information contained in the reports as a basis to make sound management decisions in the development of the company, enhance competitiveness, attract investment and loan funds, evaluation of partners, as well as determining the effectiveness of the use of material, labor and production resources.
The problem is solved with the help of financial analysis:
- Definition of company financial position at the moment
- To identify trends and patterns in its development for this period
- To establish the factors those negatively affect the financial condition,
- The identification of reserves that a company can use to improve their financial condition
- To make recommendations aimed to improve its financial condition.
Solve these problems can only be if both of two conditions: a sufficient level of detail of the analytical accounting, and the availability of flexible mechanisms for reporting and queries, allow you to group and present your information in the required form for the user.
For a detailed review of data tasks necessary to develop methods of analysis for each of these areas. The most promising conducting work on each area separately (block) with the union of outcomes analysis in the final reporting forms. This allows you to determine which of the main tasks of financial analysis and to what extent and in what order should be dealt with the auditor in the performance of complex analysis. But we should not forget about the business entity as a holistic system.
The process of developing a program for financial analysis of the business entity - the most time-consuming and complicated, as it was at this stage should be selected from a variety of existing most appropriate for the subject of methods of research and evaluation (criteria), its financial condition and financial activities.
There are no perfect research techniques and assessments used in practice. All they either repetitive or are under development or have significant deficiencies and shortcomings, did not conclusively solve tasks. The program should include a detailed list of procedures, indicators and assessments required for the task.
The auditor develops standard procedures (instructions) and output forms (tables), which will reduce time and improve efficiency of financial analysis. However, in the process may have not mentioned the circumstances associated with atypical study subjects. In this regard, the program must take into account the possibility of adjustments in the process of implementation.
Thus, it is important to carefully and reasonably identify the problem, choose the research methods, parameters and evaluation (criteria), allowing the full discloses financial condition and characteristics of financial activities entity to deal with management problems.
Objectives of financial analysis company
By: Nikolas Chist
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