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Financial Analysis

All companies need to analyze their financial status periodically by analyzing important financial data of their company. The financial officer of the firm interprets the financial statements of the company and creates a report for the management after conducting a financial analysis of these statements. The report is then used by the top management for decision making.
Financial statement analysis involves analyzing the firm’s financial statements to extract information that can facilitate decision-making. For example, an analysis of the financial statement can reveal whether the firm will be able to meet its long-term debt commitment, whether the firm is financially distressed, whether the company is using its physical assets efficiently, whether the firm has an optimal financing mix, whether the firm is generating adequate return for its shareholders, whether the firm can sustain its competitive advantage etc.
The performance of a firm can be assessed by computing key ratios and analyzing
     (a) How is the firm performing relative to the industry ?
     (b) How is the firm performing relative to the leading firms in their industry ?
     (c) How does the current year performance compare to the previous year(s) ?
     (d) What are the variables driving the key ratios ?
     (e) What are the linkages among the ratios ?
     (f) What do the ratios reveal about the future prospects of the firm for various stakeholders such as shareholders, bondholders, employees, customers etc. ?
Financial analysis is performed by both internal management and external groups. Firms would perform such an analysis in order to evaluate their overall current performance, identify problem/opportunity areas, develop budgets and implement strategies for the future. External groups (such as investors, regulators, lenders, suppliers, customers) also perform financial analysis in deciding whether to invest in a particular firm, whether to extend credit etc.

Financial analysis is one of the most key performance indicators for any business.

By conducting financial analysis of a company, one can assess the financial state of the company and its ability to generate revenue. Solvency of the firm can be judged with financial statements indicating the company's ability to pay its creditors in the short-term and the long-term. A financial analysis report of the company can also judge the company's liquidity with the company's financial ability to maintain positive cash flows. Evaluation of a company's stability is often carried out with the aid of the many financial statements and non-financial indicators.

Analysis of Financial Statement

While conducting the analysis of financial statement(s) of a company, one will need to consider the past performance of the company. The analysis of financial statements of the firm is most often done with the aid of mathematical and statistical tools; the future performance of the company can be extrapolated. Comparative and financial ratio analysis is the most common method of vertical and horizontal financial analysis; many businesses use to evaluate their financial state and performance. Financial analysis gives a holistic picture to the top management on important decisions regarding financial investments, key production decisions etc.

Business Financial Analysis

Business financial analysis is the analysis of the company's business with other similar businesses. This will help the company analyze the financial statements in order to get a peer group assessment of the company's financial standing. A trend analysis is also done to assess the company's progress in the business over the years. This financial analysis is conducted over a period of five years to be able to predict accurately the future trend of the business. Business financial analysis can be done for each of the businesses of a large company. Each of the businesses can compare the level of contribution they have in the company's overall profits. The top management usually assesses this in order to evaluate profitable and non-profitable businesses through the business financial analysis report.

Balance Sheet Ratios

Balance sheet ratios help financial officer(s) of a company conduct financial analysis based on the annual balance sheet of the company. Balance sheet ratios are based on three aspects of the balance sheet; they are assets, liquidity and equity.

Outsourcing Financial Analysis Services to India

India is today the preferred destination for FAO (Finance and Accounts Outsourcing). The success of India’s outsourcing firms has ensured that more than 80 per cent of the Fortune 500 companies are offshoring or evaluating the outsourcing of their non-strategic processes now.
Beyond the advantage of lower costs, lies India’s talent pool of qualified Financial Analysts and Chartered Accountants with domain expertise in every sphere of the finance arena.
One of these areas is financial analysis - the integration and analysis of information stored in financial systems and other critical data sources across the organization make up Financial Analysis Services from Amxthyst.

Financial Analysis Services offered by Amxthyst

     • Financial Research & Analysis
     • Corporate financial statements
     • Analysis of financial statements- monthly, quarterly, and annual management reports
     • Analysis of Portfolio structures
     • Analysis of Prospectus, Offer Documents
     • Ad-hoc reports, industry reports (fact books, competitor analysis)
     • Creation and maintenance of databases and libraries
     • Financial ratio analysis, break-even analysis, NPV and IRR analysis
     • Board of Directors and audit committee presentations on financial results

Benefits of outsourcing Financial Analysis Services

Information for action
Outsourcing financial analysis services gives management access to faster and more accurate interpretation of financial data. This enhances decision-making ability so that proactive action can be taken to improve the financial health of the organization.

Better technology
Access to improved technology means that data can be used on a regular basis to improve service levels in the company.

Business transformation
Cost savings, although substantial (30-50%) are no longer the only reason for outsourcing financial analysis, which can help a business become more competitive by providing better service and quality, continuously innovating in products and processes, thus increasing value to stakeholders.

Transparency and regulatory compliance
CFAs the world over are turning to financial services outsourcing to achieve improved financial reporting and regulatory compliance with laws.

Knowledge management
in the financial services industry contributes to the bottomline of the company.

People, processes and technology – for best-of-breed financial analysis

Amxthyst has a team of qualified Chartered Accountants, (certified public accountants) statisticians with doctoral degrees and people with MBA (Finance) from reputed institutions. They stay abreast of global trends with online journals and through link-ups with reputed CFAs abroad. They have valuable industry experience which can be effectively tapped to determine the performance and fiscal accountability of an organization. They use techniques for financial analysis services such as Ratio Analysis, ROI, Break-even Analysis, Cost/Benefit Analysis, Cash-flow and Funds-flow statements to arrive at an accurate picture of a company’s financial health.
Technical assistance is provided by our team of skilled and competent technical analysts and data entry operators. Amxthyst has the state-of-the-art technology and the talent to scale up operations swiftly. We can create scalable databases, enabling our customers to benefit from our skilled financial analysis while maintaining international standards of security and privacy.

How may we help you?

To know more about how we can help your organization with our Services, please call us at

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Alternatively, please email us at business@amxthyst.com and we will respond back with the solutions.

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