For the economy and finances of the companies, the analysis represents a very important factor since it consists of the application of several techniques and instruments with the purpose of making an inference for the application of a series of measures that will be significant and useful for the final decision making, using several techniques that correspond from the comparison of several economic processes, to the analysis of graphs.
To be able to perform an analysis is crucial to be able to predict future financing needs, as well as the company's ability to meet them; it is also very useful when it comes to making an assessment to have the possibility of distributing resources among those who have an interest in the entity. The information regarding liquidity and solvency is useful to determine the possibility of facing financial commitments.
The importance of the analysis goes far beyond what is desired by the administration, since the results facilitate the information for the universe of users interested in the company, in this way the financial executive becomes a decision maker on aspects such as where to obtain resources, what to invest in, what are the benefits or profits of the companies, when and how to pay the sources of financing, as well as the reinvestment of profits.
Methods of financial statement analysis .
During the process of financial statement analysis, we can find a variety of analysis methods that meet the particular needs of the interested parties, among which the following stand out:
Gestation Phase: In this phase the fertilization of the ovules of the bovine begins, this phase occurs after having impregnated in a natural or artificial way (by bull riding or artificial insemination); it is also very important to point out that within this phase some expenses are incurred that must be computed in order to be able to incorporate the bovine.
Vertical method: It is a method we can apply by means of a mathematical tool that is used for the accounts that make up the financial statements of a single period, in these we can make relationships of items determining the relative importance according to the totals or subtotals of each of the financial statements, from this method follows that of integral percentages, that of simple ratios and standard ratios.
Horizontal method: This analysis is of great importance for the company, since it allows to inform if the changes in the activities and if the results have been positive or negative; this will allow to evaluate which account must be revised to make for having significant movements. In addition, this method uses the evaluation of the last two periods..
Comparative method: This method is used to be able to buy the financial statements of two or three years ago and serves to determine the significant changes that have occurred in these periods, it is applied to formulate and determine the percentage to all the accounts, with the objective of evidencing the variations that may have occurred of great significance for the company.
Undoubtedly, all these methods are of great help when it comes to make any decision to management, also allows you to evaluate the behavior of any specific account to see if it is giving the expected income, as well as to determine the disbursements made in detail, very necessary aspects to take corrective actions
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