Financial Analysis For A Business Management - 1950 Words

The capability to use financial analysis to drive action is a vital skill for the market facilitators. Capacity making starts by first understanding the fundamental financial tools to engage market actors across all the levels in a chain in financial discussions (Harris. J 2009). This will ensure to absorb financial analysis into decision making and further will ensure interventions are focused on financially feasible actions. As a market organizer, your potential ability to use financial analysis when taking decisions will support you assist your internal staff and external clients to make more balanced decisions by understanding the financial restrictions faced by markets. Market Facilitation demands the capacity to take confidant†¦show more content†¦In this process of analysis whole range of instruments and procedures can be used. Firstly, it reviews comparative financial statements and the vertical analysis procedure with structural financial statements and the horizontal analysis procedure. With the help of horizontal analysis, the proneness and dynamics of particular financial statements positions can be examined. We judge efficiency and security of the company on the basis of the observations. On the contrary, financial statements are the foundation for vertical analysis that allows awareness in financial statement structure. Financial statements structure is very important for business quality. With the help of financial statement analysis we get familiar with the business quality, however the questions of the analysis are not answered by horizontal and vertical analysis procedures. When business quality needs to be measured with the he lp of financial statements, the most indicative are different financial ratios. (Zager. K 2006). Ratios play a very important role in the function of management accounting of the organization. (Smith. H 2011) RATIOS A method of expressing relationships between companies’s accounting numbers and their trends over a period of time which analysts use to construct values and assess risks. (Harvey. C 2012). Ratios must be used perfectly for it to be effective. Ratio is examining two values in management accounting; any change in each of these values