GROUP1
GROUP1
GROUP1
External Analysis
o Analysis done by the external parties by investors, financial analysts, lenders,
and general public
o The purpose is to know the financial and operating performance
o To know about the credit worthiness
2. According to Modus Operandi
• Horizontal Analysis
Years
• Vertical Analysis:
• The liabilities are analyzed as current liabilities, Debts (long term loans) and Equity
(Share Capital and Reserves
Comparative Income Statement
• A comparative income statement helps you with many accounting tasks. Here are
just a few ways the statement benefits your business:
• Compare current amounts to past years
• See if performance has improved over time
• Figure out patterns in high and low sales months
• Calculate percentages of changes
• Show how your company compares to others when securing outside capital
Common Size Statements
• In common size balance sheet, total assets or liabilities are taken as the
common base
Cash Flow Analysis
Cash flow analysis is the process of examining the amount of cash that flows
into a company and the amount of cash that flows out to determine the net
amount of cash that is held. Once it's known whether cash flow is positive or
negative, company management can look for opportunities to alter it to
improve the outlook for the business.