Financial Performance of the Company Position

Topics: Generally Accepted Accounting Principles, Balance sheet, Inventory Pages: 23 (5822 words) Published: February 27, 2011
1.1. Introduction
Finance is regarded as the lifeblood of a business enterprise. the subject management is of immense interest to every financial analyzer. It needs special attention because of complexities involves to managing cash to present day industrial function. A main aspect is the estimation of how mush of finance need for a business organization requires and too what repose. “Business finance is that business activity which is concerned with the acquisition and conversation of capital funds in meeting financial needs and overall objectives of a business enterprise”. The activity of the finance can defined as planning, raising, controlling and administering of funds in the business. The important thing in an organizations financial management is to analyses the financial performance of the firm. Here the financial performance of vijaya bank has to be analyzed. By which the researcher can find the short term solvency, working capital management for vijaya bank. This is going to be a valuable thing and which will help the concern to survive with great value. Financial management is mainly concerned with the proper management of funds. Financial analysis an overview:

The basis of financial planning, analysis and decision making is the financial information. Financial information is needed to predict, compare and evaluate the firm’s earnings ability. It is also required to aid in economic decision making, investment and finding decision making. The financial information of the enterprise is contained in the financial statement or accounting reports. Accounting system of the firm is the main sources of financial information. The accounting system helps to accumulate, measure and communicates financial information in clued owner, creditors, manager, employee, customer, supplier, government and society.

The financial statement balance sheet and profit and loss account is the basis instrument of an accounting system to communicate financial information to users. Balance sheet shows the financial condition or the statement of the firm at a particular point of time. More specifically, balance sheet contains detailed information about the firm’s assets and liabilities. Assets represent economic resources possessed by the firm. Fixed asset are used in business for more than accounting period one year, while current assets are converted into cash with in an accounting period are called current liabilities and those payable after the year or so are called current liabilities and those payable after the year or so are called long term liabilities funds contributed by owner equity. Thus balance sheets give concise summary of the firm’s recourses and obligation and measure the firm’s liquidity and solvency. The profit and loss account shows the profitability of the firm giving details above revenues and expenses. Revenues are benefits, which customer’s contribute of the firm in exchange for goods of service provides buy the firm. The cost of the economic resource use in providing goods and services to the customers is called expenses. Profit is different between revenues and expenses. Thus, the basic purpose of the profit and loss account is to provide a concise summary of the firm’s revenue and expense during a period and measure its profitability. The computation of accounting profit is affected by the arbitrary allocation of expenditure between revenue expenditure and capital expenditure. Price level changes complicate the measurement of the accounting profit. In decision making situation, the financial manager needs to focus on cash flows and economic definition of profit. Financial statement are used by the management as the basis for planning operations including procurement of adequate financing and as a means exercising control over financial position of the business and efficient and profitable use of assets. An understanding of different aspects of financial statement necessary for the development of financial...
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