Smart Index Analysis Of Financial Statements
The data published in Jhf IIs official financial statements usually reflect Jhf IIs business processes product offerings services and other fundamental events.
Index analysis of financial statements. For example in the income statement shown below we have the total dollar amounts and the percentages which make up the vertical analysis. Solvency Analysis To know the financial structure 11. Essentially one year is selected as the base year and is set to 100.
The analysis helps to understand the impact of each item in the financial statement and its contribution to the resulting figure. This is also called horizontal analysis. Index Analyses An analysis of percentage financial statements where all balance sheet or income statement figures for a base year equal 1000 percent and subsequent financial statement.
It is a useful tool to evaluate the trend situations. Analysis and interpretation of financial statements are an attempt to determine the significance and meaning of the financial statement data so that a forecast may be made of the prospects for future earnings ability to pay interest debt maturities both current as well as long term and profitability of sound dividend policy. Periods may be measured in months quarters or years depending on the circumstances.
This review involves identifying the following items for a companys financial statements over a series of reporting periods. Evaluates an organizations financial information over a period of time. The statements for two or more periods are used in horizontal analysis.
The function of the financial analyst is based on the analysis of the financial statements which is one of the main tools used in the financial and. Trend percentages Horizontal Analysis Index Analysis. Interested Parties in Analysis of Financial Statements 1.
The Analysis is made to serve the following purpose 1. The financial statement analysis by indexes is carried out through the elaboration of special ratios created among the different quantities represented in the balance. The five-year summary of selected financial data which is found in all annual reports is particularly useful in this regard.