As mentioned in the earlier blog, we have 3 different financial statements which could be analyzed to get a host of details regarding the company. We will just have brief of how we could really use these statements.
A Balance Sheet:
It tells the onlooker (may be an investor in the company or a prospective investor) 3 important things
- How much money the company has?
- How much it owes to others?
- What amount is left for the shareholder?
A cash flow statement:
Enables one look at it and get an understanding of where the money is spent.
An Income Statement:
This is also called the Profit and Loss Statement, and hence clearly indicates that it deals with the company's profitability. It tells us how much the company made or lost.
With these financial statements a person could make a choice of investing in the company, or could decide otherwise. For a manager, this performance analysis enables him realize the health of the company, the shareholder's opinion on the company and detect the drivers and thereby work on them to increase the profitability.
Read in Kannada:
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