1.1 Introduction Finance is the life i.e. blood of business. It is rightly termed as the science o f money. Finance is very essential for the smooth of the business. According to Wheeler, “Finance is that business activity which is concerned with the organization and conversation of capital funds in meeting financial needs and overall objectives of a business enterprise”. Financial management is that management activity which is concerned with the planning and controlling of a firm financial reserve. Financial management as an academic discipline has undergone fundamental changes as regards its scope and coverage. In the early years of its evolution it was treated synonymously with the raising of funds. In the current literature pertaining to this growing academic discipline, a broader scope so as to include in addition to procurement of funds, efficient use of resources is universally recognized. Financial analysis can be defined as a study of relationship between many factors as disclosed by the statement and study of the trend of these factors.
The basis for financial planning, analysis and decision-making is the financial information. Financial information is needed to predict, compare and evaluate the firm’s earning ability. It is also required to aid in economic decision making investment and financing decision making. The financing information of an enterprise is contained in the financial statements or accounting reports.
The financial analysis process is identifying the performance and trend and the areas of strength and weakness of the firm by properly establishing relationships between the items of the balance sheet and profit and loss account. It is the study of the performance of the unit and therefore is aimed at the financial performance in an individual unit.
This is therefore aimed at analyzing the performance and trend and the areas of strengths and weakness and the financial strength of the firm in
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