Limitations Of Financial Analysis Methods And Indicators

The basic methods of < p > 1. < a href= "//www.sjfzxm.com/news/index_c.asp > > financial analysis < /a > are two kinds of ratio analysis method and comparative analysis method, no matter what method is reflected in the past economic development of enterprises.

In addition, the time that accounting statement users get the accounting statements and the time that the business takes place is even longer.

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< p > 2. comparability is the soul of comparative analysis. Only comparable indicators can be valuable by comparative analysis. Due to the limitations of < a href= "//www.sjfzxm.com/news/index_c.asp" > report data < /a >, the data of different enterprises and even the same enterprise in different periods are not comparable. In this sense, the application of comparative analysis method is bound to be affected.

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< p > 3. the accounting treatment methods of enterprises such as < a href= > //www.sjfzxm.com/news/index_c.asp > accounting policy > /a > should be specified in the statement or annotations of accounting statements. However, due to the limitation of the ability, experience and knowledge level of accountants and accounting statements users, it is not always possible to complete comparable adjustment work.

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The financial indicators for "P > 4." lack a unified general standard. The industrial developed countries, such as the United States and some Japanese governments and financial institutions, regularly distribute the financial statistics of each industry, even with the trade unions of the industry enterprises and the credit departments of individual companies, and collect data on the average financial ratios of the industry.

However, some financial data provided by some newspapers and periodicals are usually divided into industries, with large sampling errors and lack of representativeness.

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< p > 5. current financial analysis indicators often focus on "quantity" rather than "quality". Accounting statements are difficult to disclose detailed information, making it difficult for users of accounting statements to obtain information such as inventory structure, asset structure, lot size and seasonal production changes.

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< p > the ultimate goal of financial management activities is to maximize the wealth of owners.

From a static point of view.

The first is to maximize the return on net assets.

Therefore, this index is the core of the enterprise profitability index, and it is also the core of the whole financial index system.

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< p > related links: < /p >

< p > for domestic enterprises, with the deepening of the market economy, the pnational operation of enterprises is increasing day by day, and the structure of enterprises is becoming more and more complex. It is more and more important to make effective use of financial data and achieve correct business decisions through financial analysis.

Financial analysis usually refers to the process by which financial personnel use financial data and indicators to determine the operation and financial status of a company. It follows certain theoretical methods.

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< p > business conditions vary widely, but no matter what stage of development or business environment it is in, its operation and financial status can be reflected through the balance sheet, the profit statement and the cash flow statement. The three financial master list is the international common language, and there is no big difference in the implementation of market economy in all countries.

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< p > effective financial analysis based on report data not only enables business operators to understand the level of profits and solvency of enterprises, but also can find out the size of business risks and the advantages and disadvantages of enterprise capital structure, so that managers can make correct decisions in various aspects of enterprise operation and maximize profits with minimum risk and healthiest financial condition.

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