FINANCIAL STATEMENT-MEANING,OBJECTIVE AND QUALITATIVE CHARACTERISTICS

FINANCIAL STATEMENT-MEANING,OBJECTIVE AND QUALITATIVE CHARACTERISTICS

1. FINANCIAL STATEMENT-MEANING,OBJECTIVE AND QUALITATIVE CHARACTERISTICS PRESENTED BY… HARSHITHA S 1 st M.Com Under the guidance of Sundar B. N. Asst. Prof. & Course Co-ordinator GFGCW, PG Studies in Commerce Holenarasipura

2. CONTENTS Introduction Meaning Objectives of financial statement Analysis Qualitative characteristics of financial statement Conclusion Bibliography

3. INTRODUCTION Financial statements are the means by which companies communicate their story. Together these statements represent the profitability and financial strength of a company. The financial statement that reflects a company’s profitability is the income statement. The statement of cash flows shows the cash inflows and outflows for a company during a period of time.

4. MEANING According to the Financial Accounting Standards Board (FASB),the financial statements of a firm should provide sufficient information that is useful to Investors and Creditors In making their investment and credit decisions in an informed way.

5. To estimate the earning capacity of the business concern To find out the operating performance of a company. To examine efficiency of various business activities. To find out the financial performance of a company. Objectives of financial statement analysis

6. To judge the managerial ability. To compare the performance of a company for different periods. To assess the borrowing capacity of the business concern. To determine the long term liquidity and solvency of the business concern. To decide about the future prospects of the business concern. To know the profitability and collection policy of the business concern. To verify the correctness and accuracy of the decision taken by the management already. Objectives of financial statement analysis

7. To compare the overall performance of the company with other similar companies. To examine the impact of past decision of the management on financial aspect. To determine the debt capacity of the firm. Objectives of financial statement analysis

8. Qualitative characteristics of financial statement Fundamental (primary) Qualitative Characteristics Relevance To the needs of users to assist in evaluating performance. Confirmatory value Predictive value II. Representational Faithfulness Complete Neutral Free from error

9. Fundamental qualitative characteristics Opportunity Credibility Materiality Conservation Accurate representation

10. Enhancing (Secondary) Qualitative Characteristics Verifiability Timeliness Understandability Comparability With other business With the previous periods results

11. Reliable can be relied upon Free from material error Neutral Complete Prudent.

12. CONCLUSION The study is made on the topic financial performance using ratio analysis with five years data in Umami Limited. The financial performance of the company for the five years is analyzed and it is proved that the company is financially sound.

13. BIBLIOGRAPHY Objectives Financial Statements Analysis (Retrieved https ://accountlearning.com/objectives-of-financial-statement-analysis / ) 20/04/2021 Qualitative characteristics of financial statements ( Retrieved https ://corporatefinanceinstitute.com/resources/knowledge/accounting/qualitative-characteristics-of-accounting-information / ) 20/04/2021