Many of us are ignorant of the importance of financial analysis before committing our hard earned funds to any investment. we may at the end lose all we have laboured for. GOD FORBIDS.

Financial analysis is the critical review of financial information to determine the viability, sustainability, healthiness of any business venture or entity. it also includes the critical review of the cashflow projections and statements to help determine the liquidity position of the venture.

Financial analysis has become important in nigeria today, given the influx of sick and dying companies into the stock market and other markets in which investors lose part or all of their fund.

i could remember the incident of all states trust bank where all the investors are still "looking mirror"(sic). also the recent cadbury saga. we therefore need to discuss financial analysis, because it represents the basic tool for investment decision making.

what do you think?

the first analysis is to determine the profitability of the company. this is done by calculating the profit margin: gross profit divided by sales.(GP/Turnover) the higher the percent the higher the profitability. in like manner, you can compare the net profit to sales : Net profit divided by sales (NP/turnover) if this margin is high, the management is prudent in minimizing admin expenses. the higher the net profit margin the higher the profitability. you can also compare the return on capital employed by the management to determine the efficiency of the management.

see you tomorrow on how to determine the going concern and cashflow of a venture or business.

for more information contact remmychess@yahoo.com
cheers

am entised by ur caption but i wanna ask if u dont mind. wot authority r u on dis matas profesionali? r u an acountant?

thanks lifeman
am a certified professional accountant interested in ensuring that young entrepreneurs dont lose their hard earned fund.

regards. i will continue with the topic tomorrow

babaife:

thanks lifeman
am a certified professional accountant interested in ensuring that young entrepreneurs don't lose their hard earned fund.

regards. i will continue with the topic tomorrow

God bless you my brother!! Abeg use Access Bank financial stm as Case Study.
http://www.accessbankplc.com/downloads/Prospectus.pdf