How about business management financial analysis

Abstract: Financial Analysis is an extremely important business management part. To do Financial Analysis, we must clear the purpose of analysis, understanding of Financial Analysis procedures, adhere to the principles of Financial Analysis, using the correct method of analysis, to fully understand the nature and Financial Analysis its limitations, for business management and decision-making based on reliable information.

Keywords: business management Financial Analysis
Also known as financial statement analysis financial analysis, refers to the corporate financial statements and other information as the primary basis and starting point, using a special method, the financial position and operating results of systematic analysis and evaluation, to reflect the business process of enterprises in the past operating results, financial situation and development trend of corporate financial management to improve and optimize the business decision to provide important financial information.

As can be seen from the above definition, financial analysis of enterprises has been completed a summary of financial activities, is also the basis of financial projections. Through the analysis of past financial information, the report data will translate into a large number of firm-specific information useful for decision-making , reduce decision uncertainty, thereby reducing decision risk, the financial analysis in financial management of the cycle plays a role in connecting link, it has the following characteristics:
First, the analysis was based primarily on the financial statements. Corporate financial officers during the financial analysis is mainly based on financial statements, financial data, but they are not the only basis. For example, public disclosure of listed companies in the prospectus, the listing announcement and audit reports issued by certified public accountants, the capital verification report by renewable as the basis for financial analysis.

Second, the analysis of diversification. Financial analysis methods include comparison, ratio analysis, factor analysis method.

Third, the analysis of objects both in the past financial position, results of operations, including the company's future prospects. Then, how to conduct financial analysis, I believe that the following aspects:
First, the clear purpose of financial analysis
Do anything to be a clear goal, the purpose of financial analysis, the same can be simply summarized as follows:
(A, evaluate the enterprise's business performance in the past. As a business manager must understand the operating results of companies in the past, such as the size of sales revenue, the amount of net profit and cash flow. After learning that the above financial information, can compared with the industry to evaluate the operating results of companies in the past.

(B, to measure the financial position of companies now. As a business manager must understand the current financial and business conditions, such as the assets are owned and the value of the amount of debt, inventory number, and sovereign debt and capital proportional relationship. In kept informed of the above information, may provide the enterprise management to understand the true financial position of the current situation of enterprises in order to assess the potential future development of enterprises.

(C, forecasting future business trends. Enterprise management, the need to develop a number of options for future development programs, and then for the current operation, weighing the future development trend, make the best choice. For the enterprise implementation of investment decision-making authorities decision to provide services, but also from the value of the relevant business sector advisory services.

Second, understanding of the financial analysis program
A wide range of financial analysis, different statements for different purposes according to their users to select different data, different methods for analysis. So there is not a unified financial analysis, analytical procedures, specific procedures for the analysis according to their purpose, method and analysis of objects design. but usually the general procedure is as follows:
(A, a clear analysis of the purpose of
(B, collection of relevant information
(Third, organize the information collected, classified according to the purpose of analysis
(D, calculate the relevant financial indicators
(E, analysis of financial indicators, find out the reasons for the evaluation and provide useful information to decision-making
Third, the master of financial analysis
Financial analysis methods applied, depending on the content of financial statements to be achieved through analysis of the purpose and requirements, financial analysis methods include quantitative analysis and qualitative analysis.

(A, quantitative analysis
The so-called quantitative method is to use some scientific methods, listed in the financial statements of the financial information for analysis, Research, explained. From the evaluation of the quantity of the financial situation of enterprises, such as: Quantitative evaluation of profitability to According to the data analysis to: calculate a series of financial indicators reflect the profitability. So, the basic methods of financial analysis usually has the following three:
1, ratio analysis
The ratio is calculated by a variety of indicators to determine the extent of economic activity changes in the method, it is the most widely used financial analysis of a method. Ratio index types are:
First, the composition ratio, also known as structural ratio: refers to a general in the "amount of a component" accounted for "total volume ratio" is calculated as:
The amount of a component
The composition ratio = --------- �� 100%
The overall amount of
Such as the asset structure ratios.

Second, the dynamic ratio: refers to a financial index contrast between the amount of different periods, reflecting changing trends and changes in levels of ratio. The formula is:
Current Amount
Dynamic ratio = --------�� 100%
Base amount
Such as product sales revenue dynamic ratio.

Third, relevant indicators ratio: refers to two different but related indicators of the nature of comparative analysis, the evaluation of the financial ratios calculated.

With the ratio analysis to evaluate the financial condition of enterprises, whether the rate should be used depends on what the purpose of analysis of different parties concerned. For example, banks in considering whether to grant short-term loans to enterprises, the main concern is the liquidity of corporate assets, so paying particular attention to liquidity ratios. If the current ratio, quick ratio and cash ratio, long-term creditors are primarily focused corporate profitability and operating efficiency, long-term debt in order to grasp the level of protection. Therefore, special attention to indicators of corporate profitability. such as interest earned ratio, the profit margin, asset-liability ratio and so on. reposted elsewhere in the Research Papers Download http://www.hi138.com 2, factor analysis
Factor analysis, also known as factor substitution, serial replacement method: is based on the analysis of the relationship between indicators and influencing factors, to quantify the impact of various factors on the indicators of the degree, it can help people grasp the principal contradiction, or more convincingly evaluation of operating conditions.

Factor analysis also divided into:
(1, difference analysis, by analyzing the difference between the amount of change to analyze.

(2, index decomposition method, the decomposition by the financial indicators for financial analysis.

(3, serial replacement method, followed by analysis of the value instead of the standard value, determined the impact of factors on the financial indicators.

(4, fixed base substitution were used to analyze the value of alternative base period value, measured the impact of factors on the financial indicators.

In the actual analysis of the use, attention should be the relevance of factorization, factor substitution sequence, the order of the chain and replace the hypothetical results. While the above methods to be used in combination, seek a thorough analysis.

2, the trend analysis method
Is based on the financial statements of companies for several years, compare the amount of the project in order to change out for in full and the percentage change in direction and magnitude, and through further analysis, forecasting the financial position and operating results of change. Specific use it mainly in three ways:
First, the analysis of key financial indicators, financial indicators for the comparison of different periods, we can calculate the dynamic fixed base rate and rate of chain dynamics.

Second, comparison of financial statements, the balance is divided into specific comparison, compare the income statement and cash flow comparison.

Third, the project financial statements consisting of comparison, this method is based on accounting statements as an overall target of 100%, and then calculated the percentage of the various components to compare the percentage increase or decrease the project in order to determine financial activities related to the development trend.

(B, Qualitative analysis
The so-called qualitative analysis is based on an analysis by the available information and data, by virtue of the wisdom and experience, the results of quantitative analysis of the merits of the financial situation of enterprises to make conclusions, in this analysis are critical to the ability to judge. For example, the venture capital industry profit margins than other companies with high and rising trend over the years. then we can draw a strong venture capital profitability, prospects good conclusion.

With computer accounting course, the extensive use of a mathematical model can also be used to conduct financial analysis, in which no detail.

Fourth, adhering to the principles of financial analysis
When conducting financial analysis generally adhere to the following principles:
(A, from the business reality and seeking truth from facts and avoid subjective.

(B, a comprehensive look at the issue, adhere to the dialectical point of view, a comprehensive analysis of the financial situation, not isolated, one-sided view.

(Three, to use a development perspective view, against the static view. Pay attention to companies in the past, present and future relationship.

(D, quantitative and qualitative analysis combined use of quantitative analysis-based, supplemented by qualitative analysis.

(Five, to conduct a comprehensive analysis of financial, business operations is the ability to, profitability and solvency of aspects into an organic whole, a comprehensive analysis of the anatomy and enterprises. Comparison of the present comprehensive analysis of a wide range of financial methods Wall DuPont financial analysis system and the proportion score and so on.

Fifth, to grasp the nature of financial analysis
Financial analysis is a means and process, is the object of study, that the financial statements of the consolidated data into different indicators, and to find out about the relationship between the awareness of enterprises in order to achieve solvency, profitability and risk-resisting ability of the goal. Meanwhile, the financial analysis is only an understanding of the process, can only be found from the problem can not provide solutions to problems, and ultimately have to solve the problem through their own efforts by enterprises to improve. Moreover, the financial analysis is based on primary data target - Financial Statements itself has limitations, because the financial statements certain accounting assumptions based on the product, while the financial statements due to many non-normal disturbances, the financial figures easily bias, resulting in the illusion of the analyst, may lead to conclusions error, on the company's future financial policy and the implementation and carrying out financial activities have a negative impact. so that the financial statements can not reveal the actual situation of the entire enterprise, such as the solvency of the potential business, you can use trademarks and other intangible assets of enterprises to reflect, so removing the financial statements of Sino-African normal factors, a comprehensive understanding of the enterprise management level, to accurately grasp the real situation of complete financial indicators of corporate financial condition and operating results of the analysis and make the right judgments, the financial analysis can not be ignore the important content. so can be said that in the current financial analysis also its limitations, is still not perfect, especially in China is still in the development and perfection.

Can be summarized in that: to do financial analysis, we must clear the purpose of analysis, financial analysis to understand the general procedures, adhere to the principles of financial analysis, using the correct method of analysis of the financial situation of enterprises to fully understand the nature and financial analysis its limitations, for business management decision-making based on reliable information and to make the right choice. Links http://www.hi138.com Research Papers Download