Nevena Miskovic on LinkedIn: #financialstatements | 59 comments (2024)

Insightful read to find out how to perform a financial analysis.

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📈 Mastering financial analysis is crucial for any finance professional. It involves 13 essential steps, from obtaining financial statements to presenting your analysis. What's your best tip for financial analysis? Share in the comments below! #FinanceMaster #FinancialAnalysis #FinanceTips

Hello, Finance Enthusiast'slet's talk about financial analysis *feel free to add in your insights in comments Financial analysis involves assessing the financial health and performance of a company. It is used by investors, analysts, and managers to make informed decisions about investments, operations, and overall business strategy. There are two main approaches to financial analysis:* technical analysis and* fundamental analysis.TECHNICAL ANALYSIS:Technical analysis involves studying historical market data, primarily price and volume, to predict future price movements. This approach is commonly used in trading and involves using charts and various indicators to identify patterns and trends. Technical analysts believe that historical price movements can provide insights into potential future price movements.FUNDAMENTAL ANALYSIS:Fundamental analysis focuses on evaluating a company's financial statements and economic indicators to determine its intrinsic value. This approach is used by long-term investors to assess the underlying strength of a company. Key elements of fundamental analysis include:Financial Statements: Analyzing financial statements such as the balance sheet, income statement, and cash flow statement to assess a company's financial performance, liquidity, and solvency.Ratios: Calculating financial ratios like profitability ratios (e.g., ROE, ROA), liquidity ratios (e.g., current ratio, quick ratio), and leverage ratios (e.g., debt-to-equity ratio) to gain insights into the company's financial health.Earnings Reports: Reviewing quarterly and annual earnings reports to understand revenue growth, profit margins, and other key financial metrics.Market Position: Evaluating a company's market share, competitive landscape, and industry trends to assess its potential for growth and sustainability.Management and Strategy: Analyzing the company's management team, corporate governance practices, and strategic decisions to understand how well the company is positioned for success.

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Let me make Financial Forecasting easy:When your business’s finance is going south, you might have to take a look at your financial forecasting.As a CPA firm, doing financial forecasting for clients is non-negotiable.Effective finance forecasting is essential for📌Managing growth-Allocate resources-Make decisions-Hiring people-Budgeting-Strategic planningThis is how I make sure to do effective financial forecasting that my clients love.📍I ask my clients for clear objectives - The “Why” of this financial forecast.📍Hunt down the historical data- Past data are crucial here.-Financial data-Revenue-Profit-Losses-Liabilities, etc.📍Set the forecast time--I set the “how” for the forecast.-It can range from weeks to years.-It depends on the clients.-As the market and financial trend is shifting, I make sure to do the forecast for the short term rather than the long term.📍Choosing the method-It's time to choose between Quantitative and Qualitative methods of forecasting.→ Quantitative- Analyze historical information, trends, and data→ Qualitative-Experts opinions about the market📍Financial forecasting is never reliable or accurate.-It can change as the market shifts.-So I make sure to document the forecast.📍Since it is for the short term, it is easy to monitor the result and analyze the data.📍Refine and repeat.Financial Forecast shapes the main decisions of the company. It is important for professionals to do it right. In case you find this frustrating, I can give my helping hand.I’m the founder of FinAcc where I, with my extensive team of professionals, take care of your end-to-end financial services.Send me a DM to discuss.#cpa #cpafirms #financialforecasting #finance #businessfinance

financial analysis

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FINANCIAL ANALYSISFinancial analysis is the backbone of informed decision-making in the business world.Whether you're a seasoned finance professional or just starting your journey in the field, understanding financial analysis is key to success.Here are a few reasons why mastering financial analysis is crucial:Insightful Decision-Making:By analysing financial statements, ratios, and trends, you gain valuable insights into a company's performance and financial health. This information empowers you to make strategic decisions that drive growth and profitability.Risk Management:Financial analysis helps identify potential risks and opportunities within an organisation. By assessing factors like liquidity, solvency, and profitability, you can mitigate risks and capitalize on growth opportunities.Investment Evaluation:Whether you're an investor or a business owner, financial analysis is essential for evaluating investment opportunities. It helps assess the potential return on investment, assesses the company's valuation, and informs investment decisions.Performance Measurement:Financial analysis provides benchmarks for evaluating performance over time. By comparing current financial data with historical trends and industry standards, you can gauge your company's performance and track progress towards goals.Strategic Planning:Financial analysis plays a critical role in strategic planning. It helps identify areas for improvement, allocate resources effectively, and set realistic financial objectives for the future.Whether you're analysing balance sheets, income statements, or cash flow statements, mastering financial analysis skills is essential for driving success in today's dynamic business landscape.#FinancialAnalysis #BusinessInsights #StrategicDecisionMaking

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What is common sizing in finance? It is the easiest analysis you can perform. It’s also the most illustrative for FP&A. Here’s how it works:When you perform a common size analysis, you convert a key line item to 100%. For a common-sized income statement, revenue is converted 100%.Every line item underneath revenue is converted to a percentage of revenue. For example, if revenue in November 2022 is $13 million, direct labor is $3.9 million and direct overheads are $2.6 million, revenue would be equal to 100%, direct labor would be 30%, and direct overhead would be 20%.If revenue in October 2022 was $10 million, direct labor was $2.5 million, and direct overheads were $1.5 million, revenue would be equal to 100%, direct labor would b 25%, and direct overhead would be 15%.Why is this helpful?Because it illustrates how a company is performing month over month or year over year.It also shows the impact of each line item in the income statement on revenue and profit. In financial models, this is crucial.In this case, revenue has increased 30% from $10 million in October to $13 million in November. At the same time, direct labor increased by 56%. Additionally, direct overheads went up more than 73%. If we are to understand the business and the numbers, we'd want to understand why direct costs went up at a greater rate than the increase in revenue.Common sizing can be applied to the balance sheet and cash flow statement as well as the P&L. The key line items, such as total assets or operating cash flows, are converted to 100%, and other line items are calculated as a percent of the total.Finally, if you have access to industry or analyst reports, it’s common for them to report income statement figures as a percentage of revenue and balance sheet figures as a percentage of assets, liabilities, and equity. Thus, the common-sized format is a natural form for peer-to-peer comparison.#finance#accountingandaccountants#financialmodeling#seidmanfinancial

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📊 Financial Ratios Analysis Made Easy! 📊Are you looking to gain valuable insights into your company's financial performance? Financial ratios analysis is the key!Here are 5 essential financial ratios to help you assess and interpret your organization's financial health. Let's dive in! 💼🔢 1. Current Ratio (🔍): This ratio evaluates your company's short-term liquidity and ability to meet current obligations.Formula: Current Assets / Current Liabilities. A ratio above 1 indicates good liquidity.🔢 2. Debt-to-Equity Ratio (🏦): It measures the proportion of debt and equity financing in your organization's capital structure.Formula: Total Debt / Shareholders' Equity. A lower ratio indicates a lower financial risk.🔢 3. Gross Profit Margin (💰): This ratio shows the percentage of sales revenue that remains after deducting the cost of goods sold.Formula: (Revenue - Cost of Goods Sold) / Revenue. A higher margin indicates better profitability.🔢 4. Return on Investment (ROI) (📈): It measures the return generated on the company's invested capital.Formula: Net Profit / Total Assets. A higher ROI signifies better efficiency and profitability.🔢 5. Accounts Receivable Turnover (⏰): It assesses how quickly your company collects payments from customers.Formula: Net Credit Sales / Average Accounts Receivable. A higher turnover ratio indicates better cash flow management.✨ Why Financial Ratios Analysis? ✨🔹 Identify financial strengths and weaknesses🔹 Evaluate operational efficiency and profitability🔹 Make informed business decisions🔹 Monitor financial health and performance over time🔹 Benchmark against industry standards💼 How Can I Help? 💼If you're seeking assistance with financial ratios analysis or want to explore other key ratios specific to your industry, I'd be delighted to provide my expertise.Feel free to reach out via email at [your email address].🌐 LinkedIn Profile: 🌐To learn more about my financial analysis skills and achievements, visit my LinkedIn profile:Mohamed Samir CMA, IFRS DIPRemember, understanding your financial ratios is the key to making informed decisions and driving your organization's success. Let's unlock the power of financial ratios analysis together! 💪

#Financial_Analysis is the compass guiding #businesses through the sea of uncertainty. It transforms numbers into insights, empowering decisions with precision and foresight. Wanna know why, here's how it helps:1. Identifying Trends: Financial analysis can reveal trends in a company's financial performance over time. These trends can provide insights into areas such as revenue growth, cost control, and cash flow management. 2. Benchmarking Performance: Businesses can use financial analysis to compare their performance against industry peers or against their own historical performance. This can help identify areas where the company is underperforming and needs improvement.3. Risk Assessment: Financial analysis helps in assessing the financial risk of a company. Analyzing indicators such as liquidity ratios, debt levels, and profitability ratios can give a sense of the company's financial health and ability to meet its obligations.4. Informing Strategic Decisions: By providing a clear view of a company's financial health, financial analysis can inform strategic decisions such as entering new markets, launching new products, or making acquisitions.5. Investment Decisions: Financial analysis is essential for making investment decisions. By examining factors like cash flow, return on investment, and risk, companies can make informed decisions about where to allocate resources for the best return.6. Budget Planning: Financial analysis can help in budget planning by providing a clear understanding of income and expenditure trends. This can help in setting realistic budgets and financial targets.In essence, financial analysis transforms raw financial data into meaningful insights, enabling businesses to make well-informed decisions that drive growth and profitability.#Finance #Accounting #CFO

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Vertical and Hotizontal analysis together are required for the 360 degree assessment of the financial health of a company.

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