Meaning, Significance and Objectives of Financial Analysis

Analysis of Financial Statements

Preparation of the final accounts is not the end of the accounting process. It is followed by the analysis of these final accounts. Let us learn more about the meaning, importance and the objectives of financial analysis.

Suggested Videos

').appendTo(this.scroller));n2const.rtl.isRtl?(this.previous=this.$widget.find(".nextend-thumbnail-next").on("click",this.previousPane.bind(this)),this.next=this.$widget.find(".nextend-thumbnail-previous").on("click",this.nextPane.bind(this))):(this.previous=this.$widget.find(".nextend-thumbnail-previous").on("click",this.previousPane.bind(this)),this.next=this.$widget.find(".nextend-thumbnail-next").on("click",this.nextPane.bind(this))),this.slider.stages.done("BeforeShow",this.onBeforeShow.bind(this)),this.slider.stages.done("WidgetsReady",this.onWidgetsReady.bind(this))},t.prototype.renderThumbnails=function(){var t;this.parameters.invertGroupDirection&&(t=Math.ceil(this.slider.visibleRealSlides.length/this.group));for(var i=0;i

');if(this.parameters.invertGroupDirection?s.appendTo(this.$groups.eq(Math.floor(i/t))):s.appendTo(this.$groups.eq(i%this.group)),s.data("slide",e),e.$thumbnail=s,this.parameters.thumbnail!==c){var h=e.getThumbnailType(),n=p[h]!==c?p[h]:"";d('

'+n+"

").css("background-image","url('"+e.getThumbnail()+"')").appendTo(s)}if(this.parameters.caption!==c){var r=d('');switch(this.parameters.caption.placement){case"before":r.prependTo(s);break;default:r.appendTo(s)}if(this.parameters.title!==c&&r.append('

'+e.getTitle()+"

"),this.parameters.description!==c){var o=e.getDescription();o&&r.append('

'+o+"

")}}}var a="universalclick",l="onDotClick";"mouseenter"===this.parameters.action?(a="universalenter",l="onDotHover"):this.slider.hasTouch()&&(a="n2click"),this.dots=this.scroller.find(".nextend-thumbnail-scroller-group > div").on(a,this[l].bind(this)),this.images=this.dots.find(".n2-ss-thumb-image")},t.prototype.onTap=function(t){i||(d(t.target).trigger("n2click"),i=!0,setTimeout(function(){i=!1},500))},t.prototype.onBeforeShow=function(){var t=!1;switch(this.parameters.area){case 5:t="left";break;case 8:t="right"}t&&(this.offset=parseFloat(this.$widget.data("offset")),this.slider.responsive.addHorizontalSpacingControl(t,this)),this.renderThumbnails(),this.slider.hasTouch()&&(N2Classes.EventBurrito(this.$widget.get(0),{mouse:!0,axis:"x",start:function(){this.bar.width();this._touch={start:parseInt(this.scroller.css(n2const.rtl.left)),max:0},this.getScrollerWidth()this._touch.start?this.previousPane():this.nextPane(),Math.abs(e.x)<10&&Math.abs(e.y)<10?this.onTap(t):nextend.preventClick(),delete this._touch}.bind(this)}),this.slider.parameters.controls.drag||this.$widget.on("click",this.onTap.bind(this))),this.widthPercent=this.$widget.data("width-percent"),this.thumbnailDimension={widthLocal:this.dots.width(),width:this.dots.outerWidth(!0),height:this.dots.outerHeight(!0),widthBorder:parseInt(this.dots.css("borderLeftWidth"))+parseInt(this.dots.css("borderRightWidth"))+parseInt(this.dots.css("paddingLeft"))+parseInt(this.dots.css("paddingRight")),heightBorder:parseInt(this.dots.css("borderTopWidth"))+parseInt(this.dots.css("borderBottomWidth"))+parseInt(this.dots.css("paddingTop"))+parseInt(this.dots.css("paddingBottom"))},this.thumbnailDimension.widthMargin=this.thumbnailDimension.width-this.dots.outerWidth(),this.thumbnailDimension.heightMargin=this.thumbnailDimension.height-this.dots.outerHeight(),this.imageDimension={width:this.images.outerWidth(!0),height:this.images.outerHeight(!0)},this.sideDimension=.25*this.thumbnailDimension.width,this.scroller.height(this.thumbnailDimension.height*this.ratio*this.group+"px"),this.bar.height(this.scroller.outerHeight(!0)+"px"),this.horizontalSpacing=this.bar.outerWidth()-this.bar.width(),this.slider.sliderElement.on({SlideWillChange:this.onSlideSwitch.bind(this),visibleRealSlidesChanged:this.onVisibleRealSlidesChanged.bind(this)})},t.prototype.onWidgetsReady=function(){this.activateDots(this.slider.currentSlide.index),this.slider.sliderElement.on("SliderResize",this.onSliderResize.bind(this)),this.onSliderResize()},t.prototype.filterSliderVerticalCSS=function(t){};var e=!(t.prototype.onSliderResize=function(){if(this.slider.visibleRealSlides.length){if(this.lastScrollerWidth!==this.getScrollerWidth()){var t,i=1,e=this.getScrollerWidth(),s=e-2*this.sideDimension;if((t=e/this.thumbnailDimension.width)=t&&(this.localSideDimension=.1*e,i=(s=e-2*this.localSideDimension)/(this.parameters.minimumThumbnailCount*this.thumbnailDimension.width),t=s/(this.thumbnailDimension.width*i),(t=e/(this.thumbnailDimension.width*i))e;e++)i[e].$thumbnail.addClass("n2-active")},t.prototype.resetPane=function(){this.goToDot(this.currentI)},t.prototype.previousPane=function(){this.goToDot(this.currentI-this.itemsPerPane*this.group)},t.prototype.nextPane=function(){this.goToDot(this.currentI+this.itemsPerPane*this.group)},t.prototype.getPaneByIndex=function(t){return t=Math.max(0,Math.min(this.dots.length-1,t)),this.parameters.invertGroupDirection?Math.floor(t%Math.ceil(this.dots.length/this.group)/this.itemsPerPane):Math.floor(t/this.group/this.itemsPerPane)},t.prototype.getScrollerTargetLeft=function(t){this.lastScrollerWidth=this.getScrollerWidth();var i=0;t===Math.floor((this.dots.length-1)/this.group/this.itemsPerPane)?(i=-t*this.itemsPerPane*this.thumbnailDimension.width*this.ratio,0===t?this.previous.removeClass("n2-active"):this.previous.addClass("n2-active"),this.next.removeClass("n2-active")):(0

The process of reviewing and analyzing a company’sfinancial statementsto make better economic decisions is called analysis of financial statements. In other words, the process of determining financial strengths and weaknesses of the entity by establishing the strategic relationship between the items of the balance sheet, profit and loss account, and other financial statements.

The term ‘analysis’ means the simplification of financial data by methodical classification of the data given in the financial statements, ‘interpretation’ means, ‘explaining the meaning and significance of the data so simplified.’ However, both’ analysis and interpretation’ are interlinked and complementary to each other.

Suppliers of long-term debt are concerned with the firm’s long-term solvency and survival. They analyze the firm’s financial statements

Investors, who have invested their money in the firm’s shares, are interested in the firm’s earnings and future profitability. Financial statement analysis helps them in predicting the bankruptcy and failure probability of business enterprises. After being aware of the probable failure, investors can take preventive measures to avoid/minimize losses.

Answer: Analysis of financial statements provides information about the financial position & performance of the company. It helps the management in planning & deciding the future policies of the company. Analysis helps in finding out the earning capacity & operating performance of the company

Meaning, Significance and Objectives of Financial Analysis | Toppr (2024)

Suggested Videos