Finance is the life-blood of business. It is rightly termed as the
science of money. Finance is very essential for the smooth running of
the business. Finance controls the policies, activities and decision of
every business.
“Finance is that business activity which is concerned with the
organization and conversation of capital funds in meeting financial
needs and overall objectives of a business enterprise.”- Wheeler
Financial management is that managerial activity which is concerned with
the planning and controlling of a firm financial reserve. Financial
management as an academic discipline has undergone fundamental changes
as regards its scope and coverage. In the early years of its evolution
it was treated synonymously with the raising of funds. In the current
literature pertaining to this growing academic discipline, a broader
scope so as to include in addition to procurement of funds, efficient
use of resources is universally recognized. Financial analysis can be
defined as a study of relationship between many factors as disclosed by
the statement and the study of the trend of these factors. The objective
of financial analysis is the pinpointing of strength and weakness of a
business undertaking by regrouping and analyzing of figures obtained
from financial statement and balance sheet by the tools and techniques
of management accounting. Financial analysis is as the final step of
accounting that result in the presentation of final and the exact data
that helps the business managers, creditors and investors.
Financial performance is an important aspect which influences the long
term stability, profitability and liquidity of an organization. The
Evaluation of financial performance using Comparative Balance Sheet
Analysis, Common Size Balance Sheet Analysis, Trend Analysis and Ratio
Analysis had been taken up for the study with “IIFL Ltd” as the project.
Analysis of Financial performance is of greater assistance in locating
the weak spots at the IIFL Ltd even though the overall performance may
be satisfactory.