nayan project.docx

7/27/2019 nayan project.docx

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Financial Analysis is to classify the data in simple form given in financial statements and to

compare with each other to find out the strong points and weakness of the business and to

take decisions for future. For instance, if all items relating to current assets are placed in one

group while all items relating to current liabilities are placed in another group, the comparison

between the two groups will provide useful information. Actually the figures given in financial

statements do not speak anything themselves. The analysis of these figures helps the interested

reader by giving tongue to these mute heaps of figures.

In the words of Finney and Miller:

Financial analysis consists in separating facts according to some definite plan, arranging them

in groups according to certain circumstances and then presenting them in a convenient and

easily read and understandable form.

In the words of John N. Myres:

Financial statement analysis is largely a study of relationships among the various financial

factors in a business, as disclosed by a single set of statements and a study of the trends of these

factors as shown in a series of statements.

OBJECTS OR PURPOSE OF FINANCIAL ANALYSIS

The purpose of financial analysis depends on the needs of the person who is analyzing these

statements. These varying needs may be :

(i) To know the Earning Capacity or Profitability.


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(ii) To know the Solvency.

(iii) To know the Financial Strength.

(iv) To make comparative study with other firms.

(v) To know the capability of payment of interest and dividend.

(vi) To know the trend of the business.

(vii) To know the efficiency of management.

(viii) To provide useful information's to the Management.

INTRODUCTION

Financial Management is that activity is concerned with the planning and controlling of the

firms financial resources. Though it was a branch of economics till 1890 as a separate or

discipline it is of recent origin. Financial management is concerned with the duties of finance

manager in a business firm. He performs such as budgeting, financial forecasting, cash

management, credit administration, investment analysis and fund procurement. The recent trend

towards globalization of business activity has created new demands and opportunities in

managerial finance. Financial statements are prepared and presented for external users of

accounting information. As these statements are used by investors and financial analysts to

examine the firms performance in order to make investment decisions, they should prepare very

carefully and contain as much information as possible. The financial statements of the Company

include Trading profit and Loss A/c and Balance sheet. The general purpose is to analyze the


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statement to understand the financial performance of the company, management of various assets

and liabilities and their relation.

OVERVIEW OF PROJECT

The topic of this project is Financial Performance Analysis at mahabal metals pvt ltd ,Financial

Performance Analysis constitutes approach to judge the effectiveness of the financial function of

the firm. Finance is needed to promote or establish the business, acquires fixed assets, make

investigations, develop product, meeting day to day affairs of the company, encourage manager

to make progress and create value. The project work during the period of study equips the

youngsters with necessary experience and enhances the learner with adequate to the real field. It

enables the learner to meet the challenges of a business world. .

STATEMENT OF THE PROBLEM.

The financial statements reveal the true and fair view of the financial position of a concern .A

proper analysis and interpretation of these statements enables a person to judge the profitability

and financial strength of the business.

The financial statement are prepared on the basis of recorded facts .The facts are recorded in

monetary terms .The statement are prepared for a particular period and the transact orders .The

financial statements are true and fair view of the financial position of the concern.

Finance is the life blood of every business private as well as public. Therefore proper utilization

of finance by the public sector enterprise is found necessary as it is financial by the government

which is the SIGNIFICANCE OF THE STUDY.


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representative of people. The financial performance of public enterprise has been a matter of

wide interest and concern.

The type of relationship to the investigated depend upon the objective and purpose of evaluation

.The purpose of evaluation of financial statement differ among various groups or creditors, share

holders, management, labor union and so on interested in the result and relationship reported in

the financial statement, so ratio analysis is an effect in tool for analyzing the financial

performance of the firm

METHODOLOGY

The project evaluates the financial performance of the company with the help of the most

appropriate tool of financial analysis like ratio analysis and comparative balance sheet . The data

is largely depends on primary and secondary sources. Primary data is the first hand information

that is collected during the period of research. Primary data has been collected through

discussions held with the staffs in the accounts department.

Secondary data studies whole company records and companys balance sheet in which

the project work has been done. In addition, a number of reference books, journals and reports

were also used for the study.

Tools used for analysis

1.

Common size statement

2. Comparative analysis3. Ratio analysis


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OBJECTIVES OF STUDY

1. To study financial position of company2. To study solvency position of company3. To study capital structure with the help of various ratios4. To analyze profitability of firm5. To study changes in financial position over last 5 yearsCHAPTERISATION

The project report consists of five chapters. In this report the following elements are

involved.

The first chapter is introduction. Its consist of the general introduction of thetopic, objective of the study in general and in particular, Statement of the Problem,

Significance of study, Objectives, Methodology, Limitations, Period of Study, Study

Area

Second chapter includes financial statement analysis a theoretical perspective onfinancial statement analysis. It includes different tool for analysis and its limitation.

Third chapter is profile of mahabal metal pvt ltd. It includes The CompanyHistory, Vision, Mission, Quality Policy, Companys Philosophy, Corporate

Objectives and Employee Profile.

Fifth chapter includes data analysis and interpretation. Different methods such asratio analysis common size statement and a comparative analysis of various years are

made.

Sixth chapter deals with Findings, Suggestion, Conclusion.

Documents

nayan project.docx