Controlling

STRATEGIC CONTROL SYSTEM

STRATEGIC CONTROL SYSTEM

 1. FINANCIAL  2. FINANCIAL
ANALYSIS RATIO
ANALYSIS
FINANCIAL ANALYSIS

 Financial analysis involves using

financial data to assess a company's
performance and make
recommendations about how it can
improve going forward.
FINANCIAL ANALYSIS

 Balance Sheet Statement

 Income Statement
Balance Sheet Statement

 The balance sheet is a report that

summarizes all of an entity's assets,
liabilities, and equity as of a given
point in time.
 Typical line items included in the
balance sheet (by general category)
Balance Sheet Statement
Income Statement

 The Income Statement is one of a

company's core financial statements
that shows their profit and loss.
 Shows the company’s revenues and
expenses during a particular period.
Income Statement
Balance Sheet vs Income
Statement
 The difference between the balance
sheet and income statement. The
balance sheet reports assets,
liabilities, and equity, while the income
statement reports revenues and
expenses that net to a profit or loss.
FINANCIAL RATIO ANALYSIS

 Financial ratios are mathematical

comparisons of financial statement
accounts or categories. These
relationships between the financial
statement accounts help investors,
creditors, and internal company
management understand how well a
FINANCIAL RATIO ANALYSIS

 Liquidity ratio
 Efficiency ratio
 Financial Leverage ratio
 Profitability ratio
Liquidity Ratio

 Liquidity ratios are measurements

used to examine the ability of an
organization to pay off its short-term
obligations.
Liquidity Ratio

 Current Ratio

 Acid-test Ratio
Efficiency Ratio

 The efficiency ratio is typically used to

analyze how well a company uses its
assets and liabilities internally.
Efficiency Ratio

 Inventory turnover ratio

 Fixed asset turnover

Financial Leverage ratio

 Financial leverage ratios, sometimes

called equity or debt ratios, measure
the value of equity in a company by
analyzing its overall debt picture
 These ratios either compare debt or
equity to assets as well as shares
Financial Leverage ratio

 Debt to total asset ratio

 Times interest earned ratio=

 (profit before tax+interest expense) /
interest expense
Profitability ratio

 used to assess a business's ability to

generate earnings relative to its
revenue, operating costs, balance
sheet assets, and shareholders'
equity over time, using data from a
specific point in time.
Profitability ratio

 Profit margin = net profit/net sales

 Return on assets = net income/profit
 Return on equity = net income/equity