Accounting Analysis

To do accounting analysis of company is not so easy. It is complicated because for doing accounting analysis, you need super brain for knowing what is in veil of given accounting data. Because my whole life is devoted to know the deepness of accounting, so today, I am writing on the topic of accounting analysis. Before reading of this content, it is basic assumption that your business is large scale and it is being operated more than 5 years.

For doing Accounting Analysis, always remember :

1. # More you dig, more you will  know

Just to know one and two years financial statements, you will get nothing. Go deep, dig more and you will know more.

2. # More you give time, more you will know

Dear, this is accounting analysis, this is not the analysis of any new Hollywood film. If your duty is to do analysis of new Hollywood film, you can easily analyze whether it will succeed or defeat because this is entertainment industry and you spend many hours to see movies just for fun. But, for accounting analysis, you have to give time and give more time and more you will know.

Now, I am starting to do Accounting Analysis, please be serious, sit stable and study with concentration :

1. Understand your first Question of Accounting Analysis - From Where will I start Accounting Analysis? 

Answer is simple, first of all try to know what is your aim of doing accounting analysis. Different companies do accounting analysis for different purposes. From my view, one aim is single for all companies. That is to increase profitability and net worth by accounting analysis. So, from this point of view, I am doing accounting analysis.

Part One of Accounting Analysis 

In this part, we compare our different products' sale and profitability value. We have lots of products. But, do all products give us profit? No, some of our products are disliked by our customers. Suppose, we are producing 1000 types products. Now, we check its sale of last five years and our past 5 years accounting reports will show which products are sold more and which are not sold more. By filter option, we also know which product give us highest profit. Now, we create some relationship between our sale and our earning. Some product's cost will less and profit will high. At that time, we do scrutiny and make list of best products. Basis of best products may be following:

(A) Products whose sale quantity is largest but profit is less. We will continue to produce these products in future because we love our customers and they need such products. 

(B) Products whose sale quantity is less but profit is very high. We will make all these types of products because these product's cost is very less. So, these products will our help to survive in recession. 

Part Second of Accounting Analysis 

In second part, we will concentrate on dates. In accounting, dates are very important. We compare different accounting item's dates. For example, from accounting data, we are interested to know inventory conversion period. Suppose, one product is giving high sale and earning but this earning is in 5 years but other product is generating same earning within 3 months. It means low inventory conversion period is important for us because if inventory do not convert in small time, it means it is very risky.

Part Third of Accounting Analysis 

In third part of accounting analysis, we move to fund flow analysis. In this part, compare our current fund's movement with past years' fund's movement.Suppose, if we have to do five years fund flow analysis, we will compare 5 to 4 years, 4 to 3 years and  3 to 2 years and 2 to current year. From where we got fund in last five years' trend and what fund in what project we used and then we make a report which tells us whether we we had chosen good source of fund and whether we used fund correctly in correct project.

Know fund  flow analysis concept more deeply at here.

Part Fourth of Accounting Analysis 

In fourth part of accounting analysis, we do balance sheet analysis. Balance sheet analysis is to simplify each item of balance sheet. Suppose, balance sheet is showing $ 230 million as deferred revenue. It is nothing important. For better comparison, we first have to simplify it. Suppose, if we convert it in percentage, means 2% of total current liability is deferred revenue. After this, we compare each item of balance sheet with past data. After this, increase or decrease in different items is recorded in accounting analysis report for future planning according to this.

 Know balance sheet analysis more deeply at here.

Part Fifth of Accounting Analysis 

In fifth part of accounting analysis, we do Ratio Analysis. We calculate profitability ratios, solvency ratios, efficiency ratios and return ratios. We compare it with our standards and with past ratios. With this, we analyze whether our current decisions are good or need to improve them.

Know ratio analysis deeply at here.

Part Sixth of Accounting Analysis 

In sixth part of  accounting analysis, we do Financial Analysis. Financial analysis is different from ratio and balance sheet analysis. In financial analysis, we compare balance sheet and revenue statements on different basis. Comparison base may be two years or two departments or two branches. After this, we find the result of this comparison.

Know financial analysis more deeply at here.

Part Seventh of Accounting Analysis 

This is the last part of accounting analysis. In this part, we see our future risks on the basis of our past financial  reports. Every signal of risk is measured just like check up of health of human being.

Know Financial Health Analysis more deeply at here






access account accountant Accounting accounting definitions accounting ebook Accounting education accounting procedure accounting process outsourcing Accounting Software advance advertising africa Amalgamation amendments announcements Annuity assets audit auditing Australia B.Com. balance sheet bank Bank reconciliation banking basic accounting BBA benefits best bill black money blog bloggers book keeping bookkeeping Branch Accounting - full tutorial budget Budget variance business businessman CA calculator canada capital capital budgeting career cash cash book cash flow statement Chiense children china class coaching coins college commerce commerce students company computer computer accounting conference Contact vinod kumar Control Your Spending corporate accounting cost cost accounting cost center cost centre CPA credit credit card cs currency data Debit and credit debit cards debt debtor degree depletion depreciation Diwali Messages documents dollar domain Downloads Dubai e-accounting earning education Education Loans email employee EPF ERP euromoney examination excel excise duty expenses facebook factor of loan fans feature fifo FII fiji finacle finance Financial financial accounting fire insurance flickr flow forensic forex formula france fraud free fun function fund GAAP GDP gdr germany gold goodwill goodwill accounting google google apps Google Adsense google apps google base google buzz google calendar Google docs google finance google fusion tables google talk govt. GST guide health Hindi Hindi Language history holding company How to treat FBT in Tally 9 HRA ICAI ICAWI ICICI Bank IFRS income income statement Income Tax India indian railway Indonesia inflation inflation accounting infographics information inspiration insurance insurance accounting Intangible interest international Internet Introduction of Tally 9 inventory investment investment in Shares invoice IT Japan Job costing journal entries Journal Entries eBook Help Kalculate keyboard kindle kuwait laptop law LBT learning lease lecture ledger leducation Leverage Analysis liabilities lifo linkedin loan logical point loss loss of profit M.Com. m.phil malaysia management accounting manual accounting manufacturing account market marketing mastercard material MBA MCA media migration mobile money ms word ms. excel multi currency in tally 9 Multicurrency Accounting mutual fund national security new and sacrifice ratio new york times new zealand news NGO nonprofit-accounting North Georgia Mountains NPV NSE odbc office oman online application online accounting Online Accounting Course otcei pakistan parents Partnership pay pal pdf Personal Finance pie chart pie chart of income pnb podcast ppf presentation price privacy policy prize money prof. vinod kumar profit profit and loss account project management provision purchase puzzles quickbooks Quote quotes quotes of svtuition rating agency ratio analysis RBI readers real estate rectification of errors remote control reports reserves responsibility accounting retirement revenue Revenue reserves review risk rupees salary sale saudi arabia saving sbi scholarship school SEBI security service tax share share trading Shares shri lanka singapore sms social accounting society solution South Africa stock stock exchange structure student students study subsidiary company svtuition swiss bank tally tally 9 Tally 7.2 Tally 9 Tally.ERP 9 tanzania tax Tax Accounting TDS teacher teaching technology test testimonial testimonials thailand tips trading trading on equity transaction trend trial balance truthfulness tuition twitter UAE UGC - NET Commerce UK United Arab Emirates university usa valuation VAT Video Voucher and vouching Wealth wikipedia working capital youtube
Accounting Education: Accounting Analysis
Accounting Analysis
Accounting Education
Not found any lecture VIEW ALL Continue reading Reply Cancel reply Delete By Home PAGES Lectures View All RECOMMENDED FOR YOU Category ARCHIVE SEARCH ALL Lectures Not found any lecture match with your request, please help to write it and send it to our email at for making this website free accounting and finance encyclopedia. Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS CONTENT IS PREMIUM Please share to unlock