Object Finance Analysis Forex

In a globalized world we live in, we cannot compare, and we measure ourselves against the competition with the commercial sector to which we belong, or simply with past periods, it is indispensable to use financial indicators to inform us about the liquidity , debt, profitability and business activity, therefore am available this material and the application of a practical case, that will serve managers for corporate management.

FINANCIAL RATIOS

The new leadership style that assumes the finance business improvement, has created the foundation for companies to develop an organized way all the changes necessary to enable efficient management, economical and effective, through financial indicators.

During the process of analyzing financial statements provides a diverse range of possibilities to meet the objectives undertaken to plan and carry out the task of evaluation.

The analyst may choose, then, the tools that best meet the intended purpose, within which are the following:

1. Comparative Analysis
2. Trend Analysis
3. Proportional financial statements
4. Financial Indicators

From the point of view of the statement of changes in financial position and cash flow statement. Also considered within the category of expert analysis:

a) Projections of cash or cash flows;
b) Analysis of changes and changes in cash flow;
c) Statement of changes in gross margin and
d) Break-even analysis.

• Comparative analysis

This analysis technique is to compare the financial statements of two or three financial years and determine what changes have been made at different times, both by percentage and absolute, with the aim of identifying those variations that may be relevant or significant the company.

• Trend analysis

The trend analysis method is a refinement of interannual changes or comparative analysis is used when the number of years to be compared is greater than three. The comparison of financial statements in a long series of periods will assess the direction, speed and breadth of the trend and use their results to predict and project numbers of one or more material items.

• Financial statements proportional

The proportional analysis of financial statements is, in essence, the assessment of the internal structure of the financial statements, because the results are expressed as the proportion or percentage of a group or sub-accounts within a total, representative of what to be analyzed. This technique allows evaluating the change of the various components that make up the large groups of company accounts: assets, liabilities, equity, earnings and other categories that settle according to the needs of each economic entity.

• Financial indicators

Finally, indicators and financial ratios express the mathematical relationship between a magnitude and another, demanding that the relationship is clear, direct and understandable information to be obtained, conditions and situations that could not be detected by simple observation of the individual components of the financial ratio.

Other methods of analysis are:

The vertical method refers to the use of financial statements for a period to know their status or results.

In the horizontal method are compared with each other the last two periods, as in the period that is happening is compared against the budget accounting.
In the method analyzes historical trends, either percentages, indices or ratios, can be plotted to better illustrate.

Financial ratios:

Financial ratios are indicators to determine whether the entity subject to evaluation is solvent, productive, if you have liquidity.

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