Limitations of financial statements Most of the limitations are due to recorded facts, accounting rules and conventions and personal judgements. If proper care is taken and specifically prepare
Functions and Importance of financial statements. The following are some of the functions and importance of financial statements. 1. Importance of Financial Statements to Management: Management needs the
Essentials of Good Financial Statements A proper analysis and interpretation of financial statements enables the interested parties to judge the profitability and financial strength of the business. Hence,
Parties interested in Financial Statements There are many people using the financial statements. They are assessing the financial statements in terms of profitability, liquidity and solvency. Some of
Limitations of Cash Flow Statements- Cash flow statement is used as a tool of financial statement analysis. Even though, cash flow statement suffers from some limitations. Such limitations
Data necessary to take capital expenditure decisions The following data are to be collected in order to take the decision of capital expenditure. 1. Initial Investment: It is
Process of Capital Budgeting Capital budgeting is a complex process as it involves decisions relating to the investment of current funds for the benefits to be available in
Kinds of Capital Expenditure Proposals The following.are the kinds of capital expenditure proposals. 1. Independent Proposal: Independent proposal means that there is no alternative proposal to choose the
General Profitability Ratios Some profitability ratios are calculated in relation to sales, they are termed as General Profitability Ratios. Such ratios are presented below: Gross Profit Ratio. Operating
What is current ratio? It is otherwise called as working capital ratio. Current ratio may be defined as the relationship between current assets and current liabilities. Current ratio