FINANCIAL STATEMENT ANALYSIS AND COMPARATIVE STATEMENT OF AFFAIRS OF BHUSHAN STEEL

Abstract

EVERY COUNTY ECONOMIC CONDITION DEPENDS UPON THE PERFORMANCE OF ITS INDUSTRY. HOW THE INVESTORS ARE INTERESTED IN IT AS IT WILL HELP IN THE INCREMENT IN THE FLOW OF FOREIGN EXCHANGE. A SOUND AND WELL PERFORMING INDUSTRY WILL ALWAYS ATTRACT INVESTORS AS IT WILL GIVE THEM A RETURN IN A LESS TIME PERIOD, BUT IT IS NOT EASY FOR A LAYMAN OR TO PROPERLY ANALYYZE THE PERFORMANCE OF THE COMPANY. TO UNDERSTAND THE PERFORMANCE OF ANY COMPANY WE HAVE TO DO FINANCIAL STATEMENT ANALYSIS. RATIO ANALYSIS IS A WIDELY USED TOOL OF FINANCIAL ANALYSIS. IT IS DEFINED AS THE SYSTEMATIC USE OF RATIO TO INTERPRET THE FINANCIAL STATEMENT AND WEAKNESSES OF A FIRM AS WELL AS ITS HISTORICAL PERFORMANCE AND CURRENT FINANCIAL CONDITION CAN BE DETERMINED. THE TERM RATION REFERS OF THE NUMERICAL OR QUNTITATIVE BETWEEN TWO VARIABLES. RATIO ANALYSIS HELPS IN INTER-FIRM COMPARISON BY PROVIDING NECESSARY DATA. AN INTERFIRM COMPARISON INDICATES RELATIVE POSITION. IT PROVIDES THE RELEVANT DATA FOR THE COMPARISON OF THE PERFORMANCE OF DIFFERENT DEPARTMENTS. IF COMPARISON SHOWS A VARIANCE, THE POSSIBLE REASONS OF VARIATIONS MAY BE IDENTIFIED AND IF RESULTS ARE NEGATIVE, THE ACTION MAY BE INITIATED IMMEDIATELY TO BRING THEM IN LINE. IN MY STUDY I HAVE TRIED TO MAKE OUT A CLEAR PICTURE OF BHUSHAN STEEL LTD. PERFORMANCE IN THE STEEL INDUSTRY WITH THE HELP OF FINANCIAL STSTEMENTS ANALYSIS AND COMPARATIVE STATEMENT OF AFFAIRS. WHILE DOING MY INTERPRETATION RATIO ANALYSIS I HAVE FOCUSED ON 5 MAIN FOLLOWING FIELDS: LIQUIDITY  INVESTMENT / SHAREHOLDER  GEARING  PROFITABILITY  FINANCIAL WITH THE HELP OF RATIO ANALYSIS WE MEASURE RELATIONSHIP BETWEEN RESOURCES AND FINANCIAL DLOWS. IT SHOWS WAYS IN WHICH FIRM'S SITUATION DEVIATES FROM- ITS OWN PAST. OTHER FIRMS THE INDUSTRY ALL FIRMS THERE ARE SOME OTHER TOOLS THROUGH WHICH THE INVESTORS TRY TO BRING OUT THE CLEAR PICTURE OF THE COMPANY SO THAT INVESTOR CAN EASILY UNDERSTAND THAT ON WHICH COMPANY THEY SHOULD INVEST THEIR MONEY AND TOOLS ARE: CASH FLOW STATEMENT COMPARATIVE INCOME STATEMENT FUND FLOW STATEMENT