Financial management is the art and science of managing the resources (physical and financial, animate and inanimate) of an enterprise with the purpose of getting the best possible result-resource ratio to continuously subserve the cause of the expectations of all stakeholders of any enterprise. The idea is to ensure that scarce resources are allocated effectively and efficiently to competing ends and where competing ends are limited and resources are in surfeit, the challenge is to identify the most productive competing ends and also newer productive opportunities, which can absorb the resources in excess. (Exhibit A). Thus, the end result of effective financial management is seen as efforts which can bring success to any enterprise by making “two blades of grass grow where only one grew before.” Translating this lofty thought of the American philosopher Jonathan Swift into action, in the field of finance, it refers to the ability to get the best possible output (physical/financial) for any given input or using the least input (physical/financial) for any given output.
The book is supported through live examples, numerical problems with solutions, case studies and a wide variety of supporting data, information and knowledge for a better and deeper understanding of the subject matter of analysis and financial statements. At the end of the book there are case studies which cover most topics prescribed in the syllabus. Solutions to these case studies available in soft format.
The book has presented details of more than ten databases for the benefits of readers. Of course apart from these databases, CMIE and RBI databases alongwith the Economic Times, Financial express, Capital Market, Business Standard databases are accessible to analysts and interested researchers and scholars of the subject of finance.
This book is tailor-made and customised to meet the requirements of scholars intending to learn how to analyse and interpret financial statements. The syllabus of the University of Mumbai prescribes an exclusive paper-`Analysis of Financial Statements` for the two year full-time MMS degree course. This paper is the focus of the book. Yet, the topics `explored will be of interest to: various postgraduate courses in business management-MMS, MBA, MFM, MMM, MHRM, MIM, undergraduate courses in management-BMA, BBA, undergraduate / postgraduate courses in commerce, B.Com., M.Com., and also for courses of professional institutes like Institute Of Chartered Accountants of India, Institute of Cost Accountants of India, Chartered Institute of Management Accountants (UK) and other similar professional bodies across the globe. Further, this book will also useful to participants in various executive and management development programs in the area Finance where `Analysis of Financial Statements` is one of the key inputs for study to raise financial literacy and educational levels and any other individual or groups of stakeholders who are interested in learning the nuances of money management.
Contents :
1. Glossary
2. Legal Dimensions of Financial Accounting
3. Proforma Financial Statements and Instructions (Schedule VI)
4. Accounting Principles
5. Accounting Standards
6. Indian Accounting Standard vs. US GAAP
7. Schedule VI Revised
8. Cash Flow Definitions
9. Measuring, Operating, Financing and Investing Cash Flows
10. Ratios-Introduction
11. Groups of Ratios-Liquidity Ratios
12. Groups of Ratios-Profitability Ratios
13. Groups of Ratios-Valuation Ratios
14. Groups of Ratios-Leverage
15. Ratios-Different Databases
16. Mergers and Acquisitions
17. Deferred Tax Asset (DTA)
18. Buy-back of Shares, Stock Split and Reduction of Capital
19. What is Productivity?
20. Managing Productivity of Capital
21. Economic Value Added (EVA)
22. Case Studies
