Financial Analysis
Financial Analysis
Financial analysis primarily deals with the interpretation of the financial data incorporated in the Performa financial statements and the presentation of the economic facts in such a form s to make &comparative evaluation I appraisal of projects. In other words, it is mainly concerned with the development of financial profile of the project. Financial analysis deals not only with the financial aspects of a project but also with its operational aspects. Its main purpose is to establish whether the project would enable to achieve the objectives for which it is undertaken. For easy and better comparison and explanation, ratio analysis is used. Through the-ratios the relationship between various financial factors of a project is explained and their trend forecasts are developed.
In order to complete the financial profile of a project, it is also necessary to evaluate the operational strategy and the investment strategy of the project. The break-even analysis is used to explain the operational characteristics of a project. Financial strategy is evaluated in terms of financial leverage, i.e., debt-equity mix and its effect on financial returns from the project. Theoretically different types of capital structure are available-and the ultimate objective is to choose an ideal capital structure, i.e., financing mix. Investment strategy is evaluated in terms of investment criteria such as JRR, NPV, etc. These project selection criteria depict the net contribution of the project towards the improvement of the economic position of the project implementing body.
Financial Analysis - To learn more about this author, visit Sameer Madaan's Website.
Like this article? Share it with your friends
Financial analysis may be defined as the process of obtaining relevant economic information about a project in order 10 establish its financial viability It is undertaken as one of the feasibility analyses in project formulation. Most of the data required for financial analysis are obtained from market analysis, technical analysis and cost analysis. In order to develop adequate financial information, financial analysis looks at the projected capital cost estimates, projected operating cost estimates and operating revenue estimates. The information collected for the purpose are printed in the form of Performa balance sheet, Performa operating statement and cash flow statement
Financial analysis primarily deals with the interpretation of the financial data incorporated in the Performa financial statements and the presentation of the economic facts in such a form s to make &comparative evaluation I appraisal of projects. In other words, it is mainly concerned with the development of financial profile of the project. Financial analysis deals not only with the financial aspects of a project but also with its operational aspects. Its main purpose is to establish whether the project would enable to achieve the objectives for which it is undertaken. For easy and better comparison and explanation, ratio analysis is used. Through the-ratios the relationship between various financial factors of a project is explained and their trend forecasts are developed.
In order to complete the financial profile of a project, it is also necessary to evaluate the operational strategy and the investment strategy of the project. The break-even analysis is used to explain the operational characteristics of a project. Financial strategy is evaluated in terms of financial leverage, i.e., debt-equity mix and its effect on financial returns from the project. Theoretically different types of capital structure are available-and the ultimate objective is to choose an ideal capital structure, i.e., financing mix. Investment strategy is evaluated in terms of investment criteria such as JRR, NPV, etc. These project selection criteria depict the net contribution of the project towards the improvement of the economic position of the project implementing body.
Financial Analysis - To learn more about this author, visit Sameer Madaan's Website.
Like this article? Share it with your friends
 | |
 |
No article feedback found. |
| |
Leave Your Feedback |
 | |
| |||
David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
|||
Cheryl MatthynssensCheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur. Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well. A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles. She opened up a small affiliate site - The Balance Guide- to help others find resources for mental and emotional well being. Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com - Visit Cheryl Matthynssens's Website |
|||
|
To learn more about the Evan Elite Author Program please contact us. | |||
 | |
|  |
Subscribe to Sameer's articles
 | |
|
|  |
 | |
|
| |
 | |||||||
|
 | ||
 |
||
 |
||
 |
||
|
| ||
 |
| Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details. |
|
|
 |
| Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media |
|
|
 |
"Learn straight from Evan how you can Make a Full Time Income (And More) from a Website"
Click Here To Learn More |
|
|
|
|
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
|
|
|
 Tips for QuickBooks Backup Networking Is The Future Strategic Planning Guide Profitable Blog Guide The Idea Compass |
|
 | ||
 |
Fortune Hunters
CBC Entrepreneur TV | |
 |
Top 50 Franchising Blogs
Top 50 Franchising Blogs | |
| ||
 | ||||
| ||||
|
| ||||
| ||||
|
|
|
|
|
||||||||||||
|
Email us your ideas on how to make our website more valuable! Thank you Sharon from Toronto Salsa Lessons / Classes for your suggestions to make the newsletter look like the website and profile younger entrepreneurs like Jennifer Lopez and Sean Combs!
|
|
|
