Analysis Of Comparative Balance Sheet Finance Essay - Free Essay Example

Sample details Pages: 4 Words: 1101 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? 1-Liquidity position: the working capital of the company is positive in this year 2010. Cash and balances with RBI shows increment of and balance with bank and money at call are decreasing by so here current asset are decreasing by and other liabilities and provisions are increasing by and bills for collection increase by so here current liabilities are increase by and the working capital are which means the liquid position of the company is not sound and the business needs to focus on it. 2- financing position: there was an increment of in the year 2010 in long term loan which shows that business needs money from outsider and it has liability to to pay it. Don’t waste time! Our writers will create an original "Analysis Of Comparative Balance Sheet Finance Essay" essay for you Create order In this year fixed asset and investment are decreasing by and it shows that asset are decreasing it means business has sold its asset. Selling of asset and increment of long term loan shows that financial position of the company is not satisfactory and focus is needed by it. 3-) profitability position: in the year 2010 reserve and surplus are increasing by which is increment of and fixed asset and investment are decreasing by and but it cannot said that business are in profitability position because the it was said that amt. of increment in reserve and surplus was taken from loan which business has taken from outsiders profitability position of the company is not in good position. ANALYSIS OF COMPARATIVE INCOME STATEMENT On the year 2010 there was an increment of net sales by which is of 2009. Yes net sales has increased but expenses has also increased with it that is payment to employees has increased by that is operating expenses are increased by that is in 2009.which is great increment and the business needs to focus on this expenses and try to control it so that it does not affect the profit of the business. In this year interest is also increasing which is of 2009 which shows that business has taken loan from the outsider in 2009.so overall it was said that if expense will control by the business its net profit will be increased. ANALYSIS OF COMMON SIZE BALANCE SHEET 1-Liquidity position: in comparison to 2009 working capital was constant in 2010. Cash and balance with RBI up in comparison to in 2010 but balance with bank and money at call are decreased by in comparison to in 2009 which shows that current asset are decreasing in comparison to 2009 and current liabilities such as other liabilities and provisions are decreased by in comparison to in 2010 and bills for collection are increased up to in comparison to in 2010 which shows that working capital in comparison to 2009 was not sound in 2010 and the business needs to focus on it. 2-financial position: in comparison to 2009 the long term loans in 2010 are increased up to in deposits and borrowings are decreased by So in comparison to 2009 financial position of the company was constant that approx. there was n change in the long term loan. so in comparison to 2009 financial position shows a little bit increment which is adaptable and does not affect much on the business. 3-profitabilit y position: in comparison to 2009 in the year 2010 the reserve and surplus and equity shareholders are decreased up to and which was and in 2009 and investment and advances are increased up to and in comparison to and but here fixed asset and other asset are decreasing up to and in comparison to and in 2009. It shows that fixed assets has been sold in the year 2010 which shows that the business needs money in this year to fulfil its requirement it has sold its asset. It means the profitability position of the business are not satisfactory in comparison to 2009. ANALYSIS OF COMMON SIZE INCOME STATEMENT In comparison to 2009 in the year 2010 some expenses are increasing and some expenses are decreasing such as payment to employees are increasing up to in comparison to and other expenses and administrative expenses are decreasing up to in comparison to which shows that expenses has not made any kind of effect on profit of the business in comparison to 2010 and interest has also shown decrease in 2010 up to in comparison to .in 2010 the business has taken loan from outsider but in comparison to 2009 its interest loan was less and in comparison to 2009 the business has earned more profit up to in 2010 which shows that the business was in good position in comparison to 2010. TREND ANALYSIS OF BALANCE SHEET 1-Liquidity position: current asset such cash are increased up to and money at call are decreased up to and current liability such as other provisions and liability are increased up to and bills for collection are increased up to which shows that working capital of the business are increasing in comparison to 2009 and its shows that working capital was in satisfactory position thats why liquidity position was also sound. 2-Financial position: in comparison to 2009 deposits and borrowings had shown increment up to and it means the company had taken loan from outsider which means that it had liability to pay it and it may be that it effects it asset because to pay its loan it has to sell its asset so if compare 2009 to 2010 it was said that the financial position of the company is sound and the company needs to focus on it. 3-profitability position: in the year 2010 reserve and surpluses had shown an increment of but it was not said that this increment was because of profit but the reason behind this increment is that the loan has transfer to it and this loan was also used in increment of investment, advances and other asset by and but fixed asset are decreasing which shows that fixed asset has been sold in this year because of the need of the company. So it was said that profitability position of the company is not sound it was depend upon loans to fulfil its requirement. TREND ANALYSIS OF INCOME STATEMENT In comparison to 2009 there was an increment of net sales in 2010 by but there was an little bit increment in expenses also that is payment to employees increased by and other expenses and administrative expenses are increased by and other expenses, provisions and contingencies expenses are increased by which say that company needs to focus on it because now it was controlled but if business does not focus on it, it may be increased and effect the net profit of the company. So to maintain it profit it has to focus on it. Interest rate has also increased by which shows that the business has taken long term loan thats why it interest has increased.