It could be measured using various ratios and comparisons through different methods. This project aims to analysis the financial performance of five major software industries in India. The Study has been taken for four years period. Major financial indicators are studied to arrive at the relative performance of the industries and findings are enumerated in this project work. List of statements useful in analysis purposes: Income statements: Financial statement: A report of basic accounting data that helps investors understand a firm’s financial history and activities.
This is a statement showing the revenues, expenses, and income (the difference between revenues and expenses) of a corporation over some period of time. Balance sheet: Also called the statement of financial condition, it is a summary of a company’s assets, liabilities, and owners’ equity. The document distributed at the annual meeting to shareholders of record who wish to vote their shares in person. Cash flow statement: This is a statement showing earnings before depreciation, amortization, and non-cash charges. This is also called cash earnings. Cash flow from operations indicates the ability to pay dividends.
Cash and equivalents about financial management 1. Accounts receivable Money owed by customers (individuals or corporations) to another entity in exchange for goods or services that have been delivered or used, but not yet paid for. Receivables usually come in the form of operating lines of credit and are usually due within a relatively short time period, ranging from a few days to a year. 2. Inventories Money owed by customers (individuals or corporations) to another entity in exchange for goods or services that have been delivered or used, but not yet paid for.
Receivables usually come in the form of operating lines of credit and are usually due within a relatively short time period, ranging from a few days to a year. 3. Accounts payable and trade An accounting entry that represents an entity’s obligation to pay off a short-term debt to its creditors. The accounts payable entry is found on a balance sheet under the heading current liabilities. Accounts payable are often referred to as “payables”. Another common usage of AP refers to a business department or division that is responsible for making payments owed by the company to suppliers and other creditors
Each demands payment for goods or services rendered and must be paid accordingly. If people or companies don’t pay their bills, they are considered to be in default. 4. Notes payable This represents money owed on a short-term collection cycle of one year or less. It may include bank notes, mortgage obligations, or vehicle payments. 5. Accrued expenses and taxes payable An accounting expense recognized in the books before it is paid for. It is a liability, and is usually current. These expenses are typically periodic and documented on a company’s balance sheet due to the high probability that they will be collected.
Accrued expenses are the opposite of prepaid expenses. Firms will typically incur periodic expenses such as wages, interest and taxes. Even though they are to be paid at some future date, they are indicated on the firm’s balance sheet from when the firm can reasonably expect their payment, until the time they are paid. An example would be accruing interest that is building up on a bank loan. Introduction to ratio analysis Ratio analysis is an excellent method for determining the overall financial condition of your small business.