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Financial analysis - Coggle Diagram
Financial analysis
Source of data
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Market data
Market data such as the market price of securities is found in the financial press and the electricity media daily
Economic data
Economic data: GDP,CPI available from government and private sources.
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Purpose
Internally
Financial analysis is used internally to evaluation issues such as employee performance, the efficiency of operations, and credit policies
Externally
Financial analysis is used externally to evaluate potential investments and the credit-worthiness of borrowers, among other things.
Defination
Financial analysis is the selection, evaluation, and interpretation of financial data, along with other pertinent infomation, to assist in investment and financial decision making.
Financial ratios
Classification
By construction
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A return ratio
Is a measure of the net benefit, relative to the resources expended
A turnover ratio
Is a measure of the gross benefit, ralative to the resources expended
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By characteristics
A liquidity ration
provides information on a company’s ability to meet its short-term, immediate obligations.
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An activity ratio
relates information on a company’s ability to manage its
resources (that is, its assets) efficiently.
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