15. Financial Analysis

Accounting is Clerical and Finance is Intellectual

Profit and Loss Account for the year ended DD MM YY (31 Mar YY)

• A report for capturing the business profit\loss in a duration (usually year)

• All revenue and expense gets accommodated in profit-loss account

Balance Sheet as on DD MM YY (31 Mar YY)

• Financial position as on a particular date, from the day-1 of business. A statement that records Asset and Liability.

• Balance sheet date is 31 Mar

• Asset : Anything business own

• Liability: Anything business owe

Revenue Expense (OpEx)

• Any expenditure the benefit of which gets exhausted before the Balance sheet date

• Added to P\L statement

Capital Expense (CapEx)

• Any expenditure the benefit of which goes beyond the Balance sheet date

• Treated as an Asset, added to Balance sheet

Fundamental Analysis

• Types - (Economy, Industry, Company Analysis) : Top to bottom analysis

Economic Analysis - Fundamentals

• GDP: Gross Domestic Product

• Inflation: Steady inflation is linked with steady growth of a country

• Forex Reserve of a country

Industry Analysis