The financial performance analysis is a way through which companies are able to determine their ability to generate revenue or incur losses at the end of a particular period. The analysis takes into account a modular chain, which one tends to visualize as a linear flow of physical activities. This also accounts for the company’s ability to cohere, and the ability to maintain relations with numerous businesses and provide a stable relationship between the consumer and the company.
The financial performance analysis must take into account various financial documents as a source of its assessment in order to gain an accurate result. It becomes necessary to ensure that there are systematic models set up for the financial analysis. This increases the proficiency of the evaluation. Models sought for analysis should be up to date and must match the company policies, rules and regulations accordingly.
Sample Financial Performance Analysis
The following analysis has been constructed by Peers and Us Co.
Company Name: Haber Mouth Co.
Financial Year: 2012-2013
Financial Performance for the stated period:
- The organization’s integration with Brian Stocks Ltd. has lowered a firm’s risk particularly when the integrating firm competes in a structurally powerful industry.
- Conversely, strategic management has shown efficiency in production by 5%. The integration is an effective means to reduce risk.
- According to the financial perspective, a key contingency factor that explains the growth and profitability of integration is the growth rate of the integrating firm’s industry. Transaction cost economics offers a mid-range view.
- Profit increase by 5% in 6 months
- Risks averted by 2%
- Total revenue generated: $230, 0000.
- Verdict: Need to increase risk aversion and profit generation within the company.