4
Usefulness and importance
of analysing an organisation Effectively come up with a relationship between share price and value of an organization
Research Questions We need to the analysing organisation
What methods are
used to analyse organisation What is the usefulness and importance of analysing an organisation
What is the relationship between share price
and value of an organisation LITERATURE REVIEW Introduction This section intent to dig deeper into other scholars research on ways we have used to analyse this organisation of choice We use various techniques to analyse the mine which are going to be talk a lot below
. According to Sinha (2009), the analysis of financial statement is very important in adding more meaning to the financial statements of a firm. Bradley James Bryant in how to evaluate financial performance (2009) further postulate that financial analysis involves
assessing the leverage, operational efficiency profitability and solvency fora company. The process of analysing the financial statements of a company to evaluate its profitability and financial performance is referred as financial system analysis. The Main ways to analyse financial statements are given below.
Horizontal analysis: is the comparison of financial information over a series of reporting periods. Trend analysis is type of horizontal analysis used to calculate the changes in economic cycle of a business for several years in terms of changes in percentage using one of the years as base year.
Vertical analysis: Is the process of evaluating the financial performance of a company by comparing with various companies. Peterson (2003), said each category of accounts on the balance sheet is shown as a percentage of the total account and ratio analysis, which calculates statistical relationships between data. Common-size analysis is a form of vertical analysis which shows the percentages of each item in relation to its base item.
Electronic copy available at https://ssrn.com/abstract=3521211