- Financial Analysis is one of the most important concepts come under the ambit of finance (Eisen, p.12). The applicability and effectiveness of financial analysis could not be derailed from any aspect. John, who just completed his finance course, should take the course of business analysis after completing his course in Finance. Financial Analysis would certainly add value in his educational portfolio, if he really wishes to make his career in the capital markets. Financial analysis would enable John to assess the financial competitiveness of the companies and analyze the investment procedure effectively.
- Economic or financial crisis is a big and effective term which has been described by London School of Business & Economics (LSBE) and according to them; financial crisis is a term applies on an economy when the economy starts to lose a large part of their assets. In last 20 years, seven economic crises have hit the entire world but no such ramification has been done and initiated till then. Financial analysis is about to analyze the loopholes of the companies along with analyzing the financial competitiveness of the companies in particular and it is nothing to dealt with the aversion of the financial crisis, as financial crisis is a macroeconomic problem or issue, while analyzing the financial competitiveness of a company is a microeconomic indicator or thing. Capital market’s association and effectiveness could not be increased with the help of this particular tool.
- Financial statements are the end product of an organization, in which all the information related to the financials of a company would have been analyzed. The three most common errors which could be found in a financial statement during the financial reporting are
- Long Term Debt Disclosure
- Related Party Disclosure
- Errors or Omissions of Transactions
Eisen, Peter J. Accounting. New York: Barron's Educational Series, 2007.