Business financial analysis refers to the accounting of the costs, profit and losses occurred in a particular business project. This analysis helps in understanding the overall development that occurred in a particular business organization. Further this analysis helps in improving those areas which are yet not stable financially such as in case of transportation cost, labour cost or cost related to machinery.
The business financial analysis needs to be presented in terms of a written report which gives an account of the financial progress incurred in the current fiscal year.
Sample Business Financial Analysis
The business financial analysis report of company: HRM groups Pvt. Ltd.
The business financial report represented by: Mr. JM Harley, senior manager finance department (HRM groups Pvt. Ltd.)
Date of the submission of analysis: 7 July 2012
Nature of business financial analysis:
- This analysis is used to measure the profits and loss occurred in a business project and to further measure the financial stability attained through the project.
- This analysis is used to estimate the financial resources used in a particular business plan for that particular year and what further resources may be required for the same.
Parameters at the core of the analysis:
- Liquidity ratio
- Profitability ratio
- Debt ratios
- Value ratio
- Net ratio
|2007||2008||2009||2010||2011||Current year (2012)|
|Liquidity ratio (%)||13||12.6||17.5||16.4||16||18|
|Profitability ratio (%)||12.25||14.1||10||13||15.33||15|
|Debt ratio (%)||6.2||10.25||11.20||9||7||7.5|
|Value ratio (%)||33.34||45.50||50||49.5||53||54|
|Net ratio (%)||45||55.32||60||62||65||68|
Further observations and suggestions:
- The profitability ratio column shows that there have been minor ups and downs in the profit of the company, whereas current year shows a good profit rate.
- Further in case of debt ratio one can observe the reduction in debts since past years.