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# ANALYSIS OF FINANCIAL STATEMENTS BY RAVIRAJ CHALAK.pptx

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# ANALYSIS OF FINANCIAL STATEMENTS BY RAVIRAJ CHALAK.pptx

analysis of financial statement

analysis of financial statement

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### ANALYSIS OF FINANCIAL STATEMENTS BY RAVIRAJ CHALAK.pptx

1. 1. WELCOME
2. 2. • SHREE SHIV CHHATRAPATI COLLEGE JUNNAR • BACHELOR OF BUSINESS ADMINISTRATION • CLASS:- TYBBA • SEMESTER:- 5th • SUBJECT:- ANALYSIS OF FINANCIAL STATEMENT • PRESENTED BY:- RAVIRAJ DEVANAND CHALAK • SUBJECT TEACHER:- DR.INAMDAR.T.B
3. 3. IMPORTANCE/ADVANTAGES OF RATIO ANALYSIS Following are the advantages of ratio analysis: 1) Helpful in Financial Analysis: Ratio analysis helps businesses in assessing their financial standing. It can be used for short term as well as long term financial analysis. Financial statements such as Profit & Loss Account and Balance Sheet are used for this purpose.
4. 4. • 2) For Explaining Financial Robustness: Various ratios such as net profit ratio, debt equity ratio may be used for expressing financial health of the business.
5. 5. • 3) Useful for Locating Weak Areas: Ratio analysis can be used for finding areas of weakness such as high ratio of expenses or increase in debt and taking remedial measures.
6. 6. • 5) Inter-Firm Comparison: Financial analysis facilitates inter-firm comparison by bringing their performance to the same scale.
7. 7. • 6) Simplified Presentation of Accounting Figures: Ratio analysis provides more meaningful figures by showing relationship with different metrics. An absolute profit figure such as 74 lacs of profit does not say much until or unless it is put in relation to total revenue. It offers information in a more comprehensive manner.
8. 8. • 7) Assessing Operating Efficiency: Ratio analysis not only shows the financial standing of the business but also helps in evaluating operating efficiency. Various ratios such as debtor turnover or inventory turnover may be used for this purpose. These ratios help in analysing different aspects of the business quickly and accurately.This is done by calculating accounting ratios.
9. 9. THANK YOU