Financial Analysis Services

Our expert audit team of Certified Public Accountants (CPA), Chartered Accountants (CA) and CGA (finalist) provides audit services mainly to Canada and US clients. We are on panel of number of financial institutions/ Banks as stock auditors and have a specialized knowledge in analysis of the quality of assets and business of their clients (the credit parties of the financial institutions). We provide auditing services to all the industries and sectors. We have not only helped the financial institutions in deciding the quantum of credit limits to be extended to their customers but also the customers in improving their business profitability and cost reduction. Our financial analysis aims at guiding the business entrepreneur to consider the risk management so as to achieve the business goals with highest possible profitability. Our checklist of analysis includes ratio analysis, Cost-benefit analysis, Break-even point analysis, risk management and various other financial analysis

Financial analysis identifies the business trends and help in decision making. It is useful in predicting the anticipated performance of the business within the economy and its industry. It helps in taking decisions like add or drop a business line, sell or process further, make or buy, short or long-term funds requirement, to determine the avoidable costs and other financial decisions.

• Ratio Analysis

Ratios are financial indicators, which identify trends and relationships which may be important to management, investors, lenders and other interested parties.

•  Liquidity ratios : determine the short term ability to pay maturing obligations.

•  Activity ratios : determine how effectively an organization is using its assets.

•  Profitability ratios :  measure the success or failure of the organization over a given period of time.

•  Debt / equity ratio : compares the owner’s equity with total liabilities. The lower the ratio, the better is the company position.

• Accounts receivable ratio : determines the quality of its receivables and determines the number of days required to collect account receivables.

•  Inventory turnover ratio: indicates the average number of days required to sell inventory.

• Operating cycle : indicates the time period between the acquisition of inventory and its realization from sales.

• Break-even Point analysis (BEP)

BEP determines the sales required (in currency or units) to result in zero profit or loss from operations. After Break-even point has been achieved, it additional unit sold contributes to the profit of the organization.

• Cost Benefit analysis

Cost benefit analysis compares the revenues and costs in an economic model that allows the management to anticipate the profits at different levels of sales and production volumes. Costs can be separated into variable or fixed cost, which helps in cost reduction decisions and determining the ideal levels of production.

• Budgeting & Forecasting

Financial budgets are prepared in anticipation of achieving a particular level of sales volume for specified period of time. These are prepared on the basis of past performances and future expectations. These budgets help in controlling the costs and measuring the performance of the organization as a whole. The actual can be compared with the budgeted figures to improve the profitability and decision makings. Financial budgets include Preparation of Balance sheet, Profit & Loss Account, Cash Flow statement and other related reports as per the requirement of the organization.

• Variance Analysis

Variance analysis refers to comparison of actual results with the budgeted figures. This will help the managers to focus on problem areas instead of all the details of the operations. Variances can be compared with respect to efficiency, pricing, production.

• NPV & IRR analysis

Net Present Value helps in determining the initial investment amount that is required to invest in a capital asset that will yield returns in an amount in excess of the management minimum return required. It helps in determining the viability of the project.

Internal Rate of return (IRR) focuses the decision maker on the discount rate at which the present value of the cash inflows equals the present value of cash outflows. It helps in determining the acceptability of investments.

NPV focuses on amounts whereas IRR focuses on percentages.

• Leverages

Financial and operating leverages impact the risk assumed and the required return. It helps in designing the capital structure.

Operating leverage compares the effect of percentage change in sales with percentage change in earning before interests and taxes. Higher degree of operating leverage implies that a relatively small change in sales (increase or decrease) will have greater effect on profits.

Financial leverage focuses on debt financing. Organizations with a higher percentage of fixed financial cost will have a higher degree of financial leverage. Higher the financial leverage higher the profitability but also the greater its risk.

• Inventory Management

Inventories may be classified as raw materials, work-in-process and finished goods. Inventory carries various costs with it like storage, insurance, and opportunity cost of inventory investment, spoilage and obsolescence. Hence optimum level of inventory is required to be maintained to avoid the unnecessary cost of its holding, to ensure sales is not effected due to non-availability of inventory, production process is not hampered. Analysis of inventory ageing helps in identifying the fast moving stock, slow moving stock, and obsolete stock.


• Management Information Statements (MIS)

MIS helps the management in reviewing the performances and to concentrate on weak areas. MIS like product wise sales, employee wise performances, branch wise performances, account receivables outstanding period-wise, expenses incurred reports, or as per the needs of the organization can be submitted on a daily basis, weekly basis, monthly basis, yearly basis.