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Financial Accounting

Notes  Cash Flow Analysis
 Ratio Analysis
 Break-Even Analysis

9.6 Keywords

Analysis of Financial Statement: Classifying, rearranging and regrouping of financial statements
to find the weakness and strength of the business is analysis of financial statements.
Financial Statements: Profit & Loss Account, Profit & Loss Appropriation Account and Balance
Sheet are included in the term financial statements.
Fund: Fund means the working capital.
Ratio: It is the relationship of two or more financial items.

9.7 Review Questions

1. What do you mean by financial analysis? Explain its procedure.

2. Distinguish clearly between the internal and external financial analysis.
3. Differentiate between horizontal and vertical analysis and explain which one is better.
4. What do you understand by the analysis and interpretation of financial statements? Explain
in brief its various techniques.

Answers: Self Assessment

1. Interpretation 2. Thousand or hundred
3. Ratios 4. Fund flow analysis
5. Fund flow statement

9.8 Further Readings

Books Khan and Jain, “Management Accounting”.

M.P. Pandikumar, “Accounting & Finance for Managers”, Excel Books, New Delhi.
R.L. Gupta and Radhaswamy, “Advanced Accountancy”.
S.N. Maheswari, “Management Accounting”.

V.K. Goyal, “Financial Accounting”, Excel Books, New Delhi.

Online link www.futureaccountant.com

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