How banks finance against supply bills?
Payments from Government departments or Public sector Units take time for the goods supplied to them. Similarly, a party might have taken a contract for execution and he is entitled to progressive payments based on the PSU/Government departments on work executed, for which the contractor has to submit bills in accordance with the terms and…
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Analytical Approach to Projected Financial Statements
IntroductionProjected Financial Statement analysis is a critical internal tool used by organizations to evaluate their future financial trajectory. It builds on historical financial performance and recent earnings to forecast future outcomes. This analytical process supports informed decision-making by assessing various scenarios, such as changes in sales volume or operating expenses, and their potential impact on…
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Comprehensive Analysis of Financial Statements: Techniques, Components, and Strategic Importance
IntroductionFinancial statement analysis refers to the systematic examination of a company’s financial reports—namely, the income statement, balance sheet, and cash flow statement—to evaluate its financial performance and position. This analysis assists stakeholders in assessing a company’s profitability, liquidity, solvency, operational efficiency, and overall financial health. The insights derived from this process are essential for informed…
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Financial Analysis and Governance Considerations in Related Party Transactions
IntroductionRelated Party Transactions (RPTs) refer to financial or commercial dealings between a company and entities with which it shares a pre-existing relationship, such as subsidiaries, parent companies, joint ventures, key managerial personnel, or significant shareholders. While RPTs are not inherently improper or illegal, they can give rise to concerns related to conflicts of interest, lack…
Read article Creative Accounting: Ethical Implications and Financial Impact
IntroductionCreative accounting refers to the manipulation of financial information within the framework of existing accounting rules and regulations to present a more favorable financial position than what actually exists. While such practices may comply with the letter of the law, they often violate the spirit of transparency and accuracy in financial reporting. Although not inherently…
What is a Working Capital Cycle (WCC)?
The working capital cycle (WCC) is the time it takes for a business to convert its current assets and liabilities into cash. It’s also known as the cash conversion cycle. In simple terms, the working capital cycle or operating cycle refers to the length of time required to convert non-cash current assets like raw materials,…
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