FINANCIAL STATEMENT ANALYSIS
Source
Greetings, friends of the great Steemit community !!! This post is based on an essay made by me, for the subject of Management Accounting I, belonging to the curriculum of the Industrial Engineering career at UNET (UNIVERSIDAD NACIONAL EXPERIMENTAL DEL TÁCHIRA).
Since times gone by, many of the big and small companies found themselves in a financial bank, because there were no controls and the necessary techniques to solve the economic and financial problems that they were bankrupt. For these reasons, the need arose to implement methods, such as the creation of indicators that would guarantee the financial status of the company. From the establishment of basic strategies, the resurgence of companies was achieved, in order to improve the administrative capacity for efficient and efficient use of resources, thus reaching the company's primary goal.
"The fundamental objective of accounting for a company is to send information about it to a group of users or recipients of such information to help make decisions. , the accounting system generates some documents known as financial statements or financial statements, these documents, prepared with the predefined rules, provide information on the economic-financial situation of a company and on the small flows that have been modified over time". (Ortega, 2006)
It is imminent to study the vital importance of the analysis of financial data of companies, which is essential to make decisions that affect the future of the same, making correct use of the information contained in the financial statements generated by an accounting department.
It is imminent to study the vital importance of the analysis of financial data of companies, which is essential to make decisions that affect the future of the same, making correct use of the information contained in the financial statements generated by an accounting department.
The requirement of this information promotes the creation of the financial statements as such. This information has become a fundamental tool, to express what the financial situation is, consequence of some operations and changes in the financial situation of a company. The importance of this information is immeasurable, since only the companies that handle the greatest quantity and quality of their economic-financial data can make the best decisions.
The analysis of financial data greatly facilitates decision making, in order to detect deficiencies, opportunities and reactions or anticipate market demands. Making decisions is correlated with a company, a globalized world and an increasingly competitive market.
Professionals in charge of decision making in companies, not only use the analysis of the financial information provided to reveal the performance of the entity for which they work but also to know the result of his own work.
With respect to industrial engineers, in their academic training some subjects play a fundamental role, to develop the capacity for logical-mathematical and strategic analysis, such as mathematics, statistics, management , accounting, among others, which provide the industrial engineer with the necessary tools to face and successfully solve the challenges that arise daily.
Industrial engineers who are dedicated to the management areas in companies, be they manufacturing or services, must have knowledge of the techniques of analysis, planning and financial budget, and that these will lead you to the efficient management of the diverse resources of the organizations. The industrial engineer in his role as administrator of resources: human, monetary, material and technological, must include firm capacities in financial decision-making, efficient management of working capital, considerations of investment risk, resources to develop in the market of capitals, among other fields of action of the financial administrator. The knowledge of this field is basic in any type of organizations, public or private, with or without profit and its learning will provide the professional with a comprehensive vision of the strategic management of societies and the vital importance that financial decisions have in the direction of business.
All this knowledge and analysis allows industrial engineers to make decisions about aspects as important as, the amounts to which a product or service should be sold, the amounts to the which is convenient to buy a product or hire a service, the ability to pay that is available at a certain time, the financial situation of the company, the interest derived from the monetary loans of the company, improvement and implementation of technology in the industrial processes to lower production costs, the expansion capacity of the company, both physical space, workers and variety of products, among other aspects that will definitely make a difference in terms of utility or loss of the company.
In conclusion, the development of certain models and predictive methods for financial analysis in companies, seeks to provide accurate, constant and outstanding data, this has been and is extremely important, and necessary, to determine the economic-financial direction of a company, since they are a great tool to make the most accurate decisions and from these measure how successful or is it the same.
Author:Reinold Roberts
References
Reyes, I; Cadena, L and De León, I (2014) The importance of analyzing financial statements in decision making. Vol. 2, No 4. Autonomous University of the State of Hidalgo. [Online magazine]. Available at: https://www.uaeh.edu.mx/scige/boletin/tlahuelilpan/n4/e2.html
Hernández, R (2013, April 12). Financial analysis through indicators for decision making. Available at: https://www.gestiopolis.com/analisis-financiero-mediante-indicadores-para-la-toma-de-decisiones/
Ortega, J. (2006). Analysis of financial statements: theory and applications. Spain. Available at: https://www.uaeh.edu.mx/scige/boletin/tlahuelilpan/n4/e2.html
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