In a nutshell, the objective of financial analysis is a detailed cause and effect study of profitability and financial position. Financial Statement Analysis and Interpretation is vital due to following reasons -
- Estimation of future earning capacity along with computation of present earning capacity
- Inter Firm Comparison
- Determination of short as well as long term solvency of the firm
- Finding out overall and department-wise efficiency of firm on the basis of available financial information
- Assessing development in future by making forecasts and preparing budgets
- Focusing the attention on general financial strength of the business enterprise
No comments:
Post a Comment