BY:MOHAMMAD WAHID ABDULLAH KHAN
Summary: The analysis techniques & tools can be used for deciphering both internal as well as external sequence regarding an exacting business group. The present economic situation are evaluated by the supervision & proficient with the help of Wahid theory achieved by financial analysis techniques & tools
Financial analysis techniques & tools is a very immense material of financial & business area, it is impossible to the present whole of the function of Financial analysis through an articles or report , also as a financial consultant I have tried to explained it shortly that financial analysis techniques & tools in an organization’s operations,
I think if you want to be a successful financial analysis, you need to know how to relay your company’s financial modeling & financial data to management, gain insight into business financial statements of competitors, understand the financial model of your supplier, and more.
Generally we know that - Sound financial decisions depend on sound financial statements. It’s not enough anymore that you know how to calculate average weighted cost of capital, determine cash flow, or understand ratio analysis. These impressions are not easy to describe and just I have only described the introduction to them of financial analysis techniques and tools
I have explained in my article a general accepting of financial analysis techniques and tools
The most important concept is break-even analysis. This determines the point at which your business begins making a profit.
Break-even analysis is mainly vital in the planning stages of your business. It shows what sales and fees you need to create on a daily, weekly or monthly base, in classify to pay your everyday expenditure.
To put collectively a break-even analysis, you must first separate variable costs from fixed costs. Fixed costs are predictable on a monthly base, and arise whether or not you are open for business, although variable costs modify according to your business operations, for instance the cost of your supplies, material or labour. Financial analysis mainly takes or done tree decisions through his techniques and tools, financial analytical techniques equally can be filled up into these decision units.
I. Investment decision,
II. The financing decision, &
III. The dividend decision.
Develop of an exact analytical model, for example: net present value or internal rate of return, depends on the difficulty being asked. Many problems in financial management can be dealt with by employing more than one financial analysis technique. The purpose of applying an analytical technique is not necessarily to calculate a specific answer; quite, the purpose of a technique is to afford a more knowledgeable base on which to make a decision. An important consideration in financial analysis is timing. The timing of different financial policies is important in terms of interest rates, inflation, taxes, and the capital market. Most of the techniques used in financial analysis engage a point in time element
(I).Investment Decisions:
Investment decisions are possibly the most vital of the three types of financial decisions, because Different techniques are used for effective management of short-term Cash and accounts receivable than for purchases of long-term fixed assets. Investment judgment in this perspective refers to both short- and long-term reallocations of company funds. Short term investment judgments include the level of current assets (cash, accounts receivable, and inventories) necessary for everyday operations; whereas long-term investment judgments refer to fixed asset purchases, mergers, acquisitions, and corporate reorganizations
(II). Financing Decisions:
While making financial decisions, the financial analysis must determine the best financing combine or capital makeup for the company. In this logic, the best alternative is the capital makeup that allows the best evaluation of the company for the shareholders. The vital rudiments to judge in making financial decisions comprise: (1) the personality and friskiness’ of the business function; (2) the capital makeup desired; (3) the extent of time the assets will be needed; and (4) the cost of different financing.
III. The dividend decision:
The dividend policy that the business chooses is also a subject of analysis in financial management. Techniques, The three typical dividend alternatives-the stable dividend policy, the even payout ratio, and the standard low dividend policy in addition extra-must be evaluated according to the company's exact position
Financial Analysis Techniques: Financial Analysis Techniques is embattled toward external reporting and analysis, following generally accepted accounting principles (GAAP) as the foundation for the data used, this is a proper guideline & .which will be helpful for discover how to financial analysis used techniques & tools in an organization’s operations,
•accept the information, models & studies used to effectively communicate the financial side of your business to your non-financial generation
•assessment, restore and keep informed for your analytical skills to gain better insight into an organization’s operations
•affective assessment drivers to recover the value of your business
•Employ sustainable development techniques to assess your increase theory
•exemplify and correspondence the impact of operations on cash flow to your operational invention
Financial Analysis Techniques: Financial Analysis Techniques educate or informed you to use financial information effectively so you can develop better insights and analysis of your organization. You will be able to learn about:
•External analysis—competitors, customers and suppliers
•Internal analysis—liquidity, cash flow and performance
•Evaluating alternative analysis strategies
•Integrating key metrics
Financial analysis techniques & tool can be used for Wahid theory .The expression or Wahid stands for:
•W- Wakefulness
•A - Accountable
•H - Heed
•I - Intelligence
•D- Determination
“Wahid theory” is just guide to the financial consultant, financial planner, financial adviser, business owner, reader from end to end a complete financial valuation and financial valuation tools in an organization that professionals can use in preparing business valuations. I hope this prepared to possible during used on a “Wahid theory” basis.
If you are writing a business plan for a bank, your bank manager will want to see that your ideas are well thought out, but the most important aspect to him or her will be your financials. Are your assumptions realistic? And will the cash flow of the business be enough to ensure that you can make the monthly payments for the loan that you have requested? If your business is making $1,000 a month and your payments are $1,200 a month, the bank is likely to turn you away
“Wahid theory” on valuing businesses conveyed in a series of easily understandable Exposed to total financial consulting issues: Financial valuations are very much affected by specific facts and circumstances. Every situation is unique and differing facts and circumstances may result in variations of the applied methodologies. Nothing contained in these written materials shall be construed to represent the rendering of valuation advice; the exposé of a valuation opinion; the picture of any other professional opinion or service.
About the Author
MOHAMMAD WAHID ABDULLAH KHAN
S/O MOHAMMAD SAADULLAH KHAN
Mr. Mohammad Wahid Abdullah Khan is the Project director of “Max Textiles Ltd”.Mr. Wahid has been in accounting field since 1999. Prior to that he had completed over ten (10) years in various fields of Business like - Accounts, Finance, Internal & External Audit, project budgeting and project costing related positions in some of the largest group companies & the join venture companies in Bangladesh.
He consults about small- medium business owners and services professionals, business consulting service and project process. He is most experience in Financial Risk Assessment, Financial analysis, Financial Advising and Project Cost Analysis. He has published more than 200 articles & case study in different international journals. Such as Business, finance, personal finance, international finance, auditing, Risk assessment topic and performance & industrial related,
Mr. khan’s most popular articles is “WAK” Model - The way of best solution for an organization internal audit process,( 1st,2nd,& 3rd part) “WAK” Model”- for successful financial resource , “Wahid khan”- cost analysis, Wahid theory – the key of dynamic series for successful financial consulting, Wahid techniques – the Significance and dependability manner for Performance audit(1st,2nd,& 3rd part) Wahid’s Opinion - non-conformity among the performance audit and financial audit, Wahid’s view- The cogent task and the confront of financial/economic analysis in the modern business decision making , Wahid’s outlook - The Business Financial Analysis Should Be Included several required Documents with the analysis report or plan, WAHID’S JUDGMENT- difference strategic plan as opposed to an operational plan ,WAHID’S METHOD– the charismatic and fruitful guideline for financial investment decision making ,WAHID’S MEASURE - the influential and evaluated of similarity between profit & non- profit business planning & Wahid’s philosophy- The examined & careful consideration of strategic planning against business planning,& PPBS MODEL,
He has consulted with more than 30 service & product companies, in recent years Mr. Khan has been spending most of his professional time for financial consulting, Mr. Wahid is the owner of “WAM Associates” and “WAK business solutions”
Source & Published: articlesbase.com
N: B- This services has given by Mohammad Wahid Abdullah khan
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